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Mixed sales results, but automaker stocks rise on need for cars in Houston

DETROIT — The Big Three Detroit automakers on Friday reported better-than-expected August sales and issued optimistic outlooks for demand as residents of the Houston area replace flood-damaged cars and trucks after Hurricane Harvey, sending their stocks higher. General Motors, Ford and Fiat Chrysler posted mixed August U.S. sales, with GM up 7.5 percent and Ford and Fiat Chrysler down. Japanese automaker Toyota improved sales by nearly 7 percent, while Honda fell 2.4 percent. Still, analysts focused on the potential for Detroit automakers to cut inventories and stabilize used vehicle prices as residents of Houston, the fourth largest city in the United States, are forced to replace tens of thousands, perhaps hundreds of thousands, of vehicles after the devastation from Hurricane Harvey. Mark LaNeve, Ford's U.S. sales chief, told analysts on Friday that following Hurricane Katrina in 2005 "we saw a very dramatic snapback" in demand. That said, Ford sales fell 2.1 percent in August. It sold 209,897 vehicles in the United States, compared with 214,482 a year earlier. Sales were down 1.9 percent in the Ford division and off 5.8 percent at Lincoln. Demand was down for cars, crossovers and SUVs. It was not clear how many vehicles in the Houston area will be scrapped, LaNeve said, saying he had seen estimates ranging from 200,000 to 400,000 to 1 million. Ford's Houston dealers may have lost fewer than 5,000 vehicles in inventory, he said. Ford is the No. 1 automaker in the Houston market, with 18 percent share, according to IHS Markit. The company plans to ship used vehicles to Houston dealers and has "every indication we would have to add some production" of new vehicles to meet demand, LaNeve said. Investor concerns about inventories of unsold vehicles and falling used car prices have weighed on Detroit automakers' shares most of this year. Now, automakers can anticipate a jolt of demand from a big market that is a stronghold for Detroit brand trucks and SUVs. "It's got to be a positive for the industry," LaNeve said. Investors appeared to agree. GM shares rose as much as 3.3 percent to their highest since early March. Ford increased 2.8 percent at $11.34, and Fiat Chrysler's U.S.-traded shares were up 5.2 percent $15.91, hitting their highest in more than five years. GM reported a 7.5 percent increase in U.S. auto sales in August, helped by robust sales of crossovers across its four brands.

Lincoln Continental sent 'into the vault' ... again

Ford confirmed today that the Lincoln Continental will be discontinued for North America after the 2020 model year. The news certainly isn't surprising given the Continental's meager sales figures, lukewarm critical reception and the fact that the Navigator has resoundingly entrenched itself as the brand's true modern flagship. "The name will go back into the vault," Lincoln spokesperson Angie Kozleski told the Detroit Free Press. "It has a long and rich history. But production for this vehicle will be ending at the end of this year." In an official statement, the brand said the decision was due to the continued decline of full-size premium sedans in the United States. The Continental is built in Flat Rock, Mich., and dates back to 2017 when Lincoln resurrected the nameplate after a 15-year hiatus. The car itself technically replaced the unloved MKS in Lincoln's lineup, and although based on a well-received concept car, the actual production model failed to live up to the rather grand style statement that had been promised. The interior in particular was a letdown. Lincoln sold 6,586 Continentals in 2019; likely many of those were fleet sales. Nevertheless, it can be argued that this Continental triggered Lincoln's rebirth. It was named something, for starters, as the Nautilus, Aviator and Corsair would eventually follow, signaling the end to the unloved and confusing MK nomenclature. And although it didn't live up to its concept, Lincoln at least learned from the episode and didn't repeat the mistake with Navigator or Aviator. They came as promised.  Though it's dead in the U.S., the Continental will live on for 2021 in China, where its sales are in decline but not by as much. And although it'll likely be remembered as a footnote in the long history of cars named Lincoln Continental, and with few fans in its corner, at least it reaches the end of the line having left a mark. Cue the Traveling Wilburys.  This content is hosted by a third party. To view it, please update your privacy preferences. Manage Settings. Featured Gallery 2017 Lincoln Continental: Detroit 2016 View 17 Photos Plants/Manufacturing Lincoln Sedan

Ford faces class-action lawsuit for selling vehicles without brake override systems

A total of 20 Ford customers are suing the automaker in a class-action lawsuit for selling vehicles "vulnerable to unintended acceleration." According to Reuters, the suit names 30 models built between 2002 and 2010 with electronic throttle control systems but without a brake override system. Those include the 2004-2012 F-Series pickups and the 2005-2009 Lincoln Town Car. Adam Levitt, a partner with the law firm of Grant & Eisenhofer says the plaintiffs in the case want "to be compensated for their economic losses by having overpaid for cars that contained defects." Levitt contends that the plaintiffs would not have bought their vehicles or paid less for them had they known there was no brake override system in place.
Ford began installing brake override systems in its vehicles beginning in 2010. In response to the lawsuit, Ford has pointed to research by the National Highway Traffic Safety Administration that indicated that unintended acceleration is mostly caused by driver error, saying in a statement that, "NHTSA's work is far more scientific and trustworthy than work done by personal injury lawyers and their paid experts."
Belville et al v. Ford Motor Co. will be heard in US District Court in the Southern District of West Virginia.