The worsening economic crisis has taken its toll on America’s number two automaker Ford Motor Co, as it posted a 12.5% fall in US auto sales for the first quarter of the year.
The carmaker’s stock slipped just under 1% to close at $4.36 on Thursday. Year-to-date, Ford’s stock is down 47%, and that’s just part of the longer-term trend. The automaker has been struggling with plants shutdowns around the country, seeing its credit rating fall to junk status, and is burning through billions of dollars. In the last five years, Ford is down 69%, which by far underperforms competitors General Motors, Toyota, Fiat Chrysler, and Tesla.
Auto investors are looking at trends that were unfolding in the company’s sales before the health crisis broke out in the US.
Ford’s earnings for the fourth quarter of 2019 were a testament to the company’s parlous state. Ford reported earnings of 14 cents per share on revenue of $36.7bn , seeing car sales fall in the US (-1.3%), China (-14.7%) and Europe (-0.3%). As a result, guidance for 2020 was set at 94 cents to $1.20 per share well below analysts’ estimates.
A trend, which continued into 2020 when the automaker saw its sales falling 12.5% in the US Ford’s passenger car sales fell 36% and sports utility vehicle sales dropped 11% in the same period.
Currently, around 93% of Ford’s 3,100 US dealers are doing some or all aspects of sales online. The company is experimenting with virtual tours to financing and home delivery after the pandemic closed showrooms in a number of states.
The company was already struggling before the coronavirus pandemic shut down entire sectors in the US, effectively bringing the manufacturing sector to a halt.
Ford’s sales chief Mark LaNeve told Reuters it is too soon to make long-term assessments of what the effect of the outbreak will be. But he stressed the importance of “some level of government stimulus post-crisis to help customers and the auto industry to recover.”