Tag: Ford Motor Company

Automotive MMI: Sales Slowdown Continues, But Ford Motor Co Bests its May ’16


The Automotive MMI, our sub-index of industrial metals and materials used by the automotive sector, dropped by one point for a June reading of 86. The Automotive MMI has not seen an increase since early this year, when the figure accelerated from a January reading of 82 to 92 in February.
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Overall, consumers seemed to pass on auto purchases in May, continuing the slowdown from January-April. Car and light truck sales — checking in at a total of 1.52 million in May — were down for the third month in a row. Automakers reported a 1% drop in sales from the previous year, according to a Reuters report.
While Ford Motor Company’s sales are down by 3.5% in the calendar year to date compared with the same point in 2016, it had a good May, edging out GM and others, according to data from Autodata Corp.
Ford sold 240,250 vehicles in May, a 2.3% increase from its May 2016 total sales.
GM, meanwhile, sold 237,156 vehicles in May 2017, a 1.4% drop from May 2016.
As for Chinese auto sales, those are down, too, despite a strong first quarter. Reuters reported a 2.2% drop in April sales after a 5% rise in March. The decline was the largest in China since August 2015, according to the report.
So how does that related to the metals side of the story?

Military Grade Aluminum? The Ford F-150 Debate Continues

Military Grade Aluminum? The Ford F-150 Debate Continues

No greater debate has ever roiled our virtual pages than the one about Ford Motor Company and its use of the term “military-grade aluminum.” This post from last May is just one of several posts we have written about Ford’s ad campaign for the aluminum-bodied F-150 pickup and all not only rank high in our site stats but also seem to draw the most commenters willing to lend their expertise that, mostly, rejects Ford’s use of the term.

Enjoy this look back and feel free to post if you have any strong feelings about “military-grade” yourself as we look back at the year that was. — Jeff Yoders, editor

No term has brought up more discussion in the pages of MetalMiner than Ford Motor Company‘s insistence that the F-150 pickup truck is made of “military grade” aluminum.

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On this Memorial Day, we thought we’d revisit whether military grade was actually a specification or a simple marketing ploy on Ford’s part. Since the aluminum-bodied F-150 was introduced in the 2015 model year, more information about its actual construction has been shared by Ford.

Individual dealers are now touting the strength and research that went into the cab and other body parts of the F-150. “Military grade” is still sprinkled throughout the the video, but they also concede the alloy is also part magnesium and silicon. Ford also mentions that a large portion of the F-150 is, in fact, high-strength steel.

Ford has also admitted that the F-150 is primarily built from 6,000 series aluminum alloy, the strength of which is increased by heat-treating after it is formed.

The “military grade” refers to the specs that military applications of 6,000 series alloy is used in. In fairness to Ford, manufacturers and fabricators have been promoting their products as “military grade” for decades, and that’s really no different than Ford’s use of the term.

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We certainly wouldn’t recommend that anyone take an aluminum-bodied F-150 into a war zone to test just how “military grade” it really is, but, from a specification standpoint, Ford seems to have good reason to be proud of the rigor of the processes it uses to produce the F-150.

Auto Sales Down for August, Has Demand Peaked?

Auto Sales Down for August, Has Demand Peaked?

US Automakers sales numbers were down substantially in August, not that a drop wasn’t wholly unexpected — the industry has been growing strongly in recent years and at some stage was bound to peak — but the scale of the drop was enough to make the market sit up and notice.

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According to the FT, Ford’s drop was the first to report, down 8% year-on-year for the month of August to 214,482, GM was down 5% to 256,429 vehicles and Volkswagen, possibly suffering from the emissions scandal, was hit the most down 9.1% to 29,384 vehicles. Of the majors only Fiat Chrysler bucked the trend, buoyed by a strong line up of SUVs to post a 3% increase to 197,000.

The FT puts a rather gloomy picture on the results, suggesting repeatedly that the figures show the boom has come to an end, but some analysts put a more realistic slant on it saying at a seasonally adjusted number for the year of about 17.2 million is still robust and with average transaction prices continuing to climb, up 2.6% in August, automakers are doing rather well.

Soft Jobs Data

Which is just as well, because recent U.S. jobs data is softer than expected. The U.S economy created 151,000 jobs in August, down from 255,000 in July after two months of robust gains. Both the manufacturing and

Construction sectors saw a decline in hiring although unemployment held steady at 4.9%. The combination of weaker auto sales and lower new hiring will almost certainly put back any Federal Reserve rate rise until later this year.

Not that the auto figures should be taken as sign the economy is fragile. Ford gave the most negative commentary to the release of their numbers saying “We think sales have reached a plateau and at that plateau we will see some month to month volatility” while Ford VP of marketing, sales and service Mark LaNeve is quoted by the FT predicting that for the rest of the year, “We continue to see … the industry still running at historically high levels but down on 2015. For 2017 we see vehicle sales strong but at a lower level than this year” – so not so much a plateau as a peak, then. GM on the other hand was more upbeat saying they saw a strong second half of the year and potentially another record year for the industry.

Automotive is one of the most important industries for the US economy, according to the Center for Automotive Research (CAR), the auto industry supports either directly or indirectly some 7 million jobs, pays $500 billion in annual compensation and generates $200 billion in state and federal taxes including $65 billion in personal tax revenues. In short we all benefit financially from a healthy auto industry.

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Most independent analysts agree auto sales have probably peaked, the backlog of demand created by the financial crisis has been satiated for now, interest rates and, hence, financial incentives have been — and continue to be — as good as they can get and unemployment is historically low. There is a limit to how many new cars the U.S. can absorb when economic growth can be said to be no more than steady.

Automotive Demand Growth for Metals Likely to Slow

Automotive Demand Growth for Metals Likely to Slow

After news of Toyota’s recent supply chain troubles, so ably covered by my colleague Lisa Reisman last week, news from the US car industry, by contrast, couldn’t be better.

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General Motors reported $9.7 billion net income for 2015 as it was bolstered by buoyant US light-truck sales. Results for the fourth quarter more than tripled from $1.99 billion to $6.27 billion although, admittedly, benefiting from $4 billion in favorable special items.

Even so, the underlying figures were also boosted by the strong sales for the core North American operations, where earnings before interest and tax adjusted for special items rose 25% to $2.77 billion, on revenue up 9.5% to $27.7 billion. The company said low fuel prices boosted sales of more profitable pickup trucks and sport-utility vehicles.

Sales Surging

A rising tide lifts all boats, they say, and a strong North American market has also benefited Ford Motor Co. whose sales of SUVs and pickups soared last year. Ford announced a 13.6% rise in SUV sales for its Ford and Lincoln brands and a 13% rise for pickups. GM’s GMC premium light-truck brand recorded 13% year-on-year sales growth, while Fiat Chrysler’s growth came nearly entirely from a 42% surge in sales for its Jeep SUV brand. All manufacturers finished the year on a high, but for Fiat Chrysler sales were its strongest in the month of December since Chrysler was founded in 1925.

[caption id="attachment_76773" align="alignnone" width="300"]Car Sales Source: Financial Times[/caption]

The US car industry has been a major bright spot for metals consumption in recent years with rising volumes driving demand for both steel and aluminum. Indeed, for aluminum, so strong has the demand been many manufacturers have made investments in dedicated automotive-grade production facilities to meet demand.

Metal Demand Effect

So, any reversal of that rising trend could have a significant impact on metal demand with knock-on pressure on prices and metal availability at manufacturers and distributors, even for non-automotive commodity grades, this year if production line capacity is in surplus.

January car sales started off actually better than analysts had expected, with two fewer buying days in the month than last year and a massive east coast snow storm, Reuters had been expecting a decline of between 0.5 and 5.0% but, in fact, sales on the whole held up well with only a 0.3% decline.

Results were mixed, however, with GM sales up 0.5%, while Ford sales fell 2.6%. Toyota also showed sales down 4.7%, as did Volkswagen down 14.6% — seen as a knock-on from the diesel emission scandal, and Honda down 1.7%.

Fiat Chrysler did particularly well, though, up 7%. GM pickups came to the rescue with best sellers such as GM’s Chevy Silverado and Fiat Chrysler’s Ram both up 5%. Industry-leading pickup Ford’s F-150, though, fell 5% in January. Although the company explains it is maintaining strict market discipline by not offering large discounts for a single model consuming significant volumes of aluminum, if that trend continues there will eventually be ripples in the supply chain.

What About the Rest of the World?

Strength last year in the US market doesn’t equate to strength globally, though. Toyota, one of the most global of brands, has reported sales weak in Europe and Asia. Where Toyota’s sales were up 33,032 in North America last year, they were down nearly a quarter of a million elsewhere. Daimler, by contrast, had a record year in 2015, helped by strong demand in China for its new range of locally produced cars but car sales in China generally are weak and growth is faltering.

According to the WSJ in the January-to-October period, new car sales grew 3.9% to 13.3 million vehicles, but that compares with a 10% gain during the 10-month period a year earlier and was only achieved after Beijing slashed the 10% purchase tax in half on vehicles with engines smaller than 1.6 liters to rejuvenate the car industry in late September.

Before the announcement of the new tax policy, new car sales in the country had dropped for three consecutive months and many fear the trend could return in 2016 as the sugar rush of tax savings becomes the norm.

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Finance costs in North America are set to remain low. The Federal Reserve will not be raising rates this year. Meanwhile, employment is strong even if wage growth is modest. Fuel costs will remain low and there is still a backlog of older cars needing replacement.

Car sales in North America should remain strong in 2016, similar to 2015. Although it is too early to back this up with hard figures, the expectation — even among manufacturers — is any growth is likely to be modest.

Growth elsewhere faces considerable headwinds and, although, the consensus is China will maintain positive GDP growth, it has the propensity, with an unstable stock market and currency depreciation, to cause shock waves both domestically and globally. The automotive metals sector is, therefore, likely to face a more challenging 2016 than last year with manufacturers once more focusing on their costs to maintain similar levels of profitability in the year ahead.

Ford Motor Co. Out From Down Under, Copper Price Up on Automotive MMI®

Ford Motor Co. Out From Down Under, Copper Price Up on Automotive MMI®

Looks like Australians won’t be thinking Ford first anymore – or rather, Ford is not thinking Australia first. Having produced cars down under since 1925, the auto company is pulling […]

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