An update by Ford Motor Company reflected a decline in sales for the current quarter against a backdrop of supply chain issues, with the semiconductor chip market remaining tight.
A volatile and uncertain macroeconomic environment, due to a spike in inflation and rising interest rates, were other factors impacting consumer spend.
However, an uptick in demand in June, resulted in Ford’s market share in the US increasing to 12.9%, outperforming other automotive players in the industry.
This was driven by strong demand for electric vehicles, such as the F150 Lightning pick-up truck, which made its debut in May 2022, with an order book stretching into 2023.
This new model electric truck was the best-selling pick-up in June, with SUV automobiles accounting for the majority of US sales.
New model innovation, such as the Bronco Sports brand and the Mustang E vehicles have also resulted in stronger brand recognition, particularly in the US market which is the largest and most profitable for the group.
Ford’s strategy to grow its Battery Electric market share, which is highly profitable relative to the sale of combustion vehicle engines, will take time to achieve with the company undergoing a major transformation.
Fitch, the credit ratings agency, recently upgraded Ford to a positive outlook, with its signally sufficient cash reserves enabling the company to invest in the electric vehicle industry.
Ford will present its results later this month (27th July) and appears to be in a turnaround mode. At a current price of $11.65 per share, this represents a fair value. Investors should wait for the results before making any investment decisions.