Ford Sales Drop, but So Do Inventories

Ford(F) said its sales fell 24.2% in May from a year earlier, but said it will boost production as a result of tight inventories and strong new product sales.

The automaker says it will increase second-quarter North American production by 10,000 to 445,000 vehicles and will increase third-quarter production by 42,000 to 460,000 vehicles.

"New products account for 50% of our sales, and demand for these products is driving our market share gains," said Ken Czubay, vice president of sales and marketing.

At the end of May, Ford vehicle inventories totaled 350,000, equivalent to a 56-day supply. The level was 41,000 vehicles lower than at the end of April and 210,000 vehicles lower than a year ago.

Ford said it achieved market-share gains even as it reduced incentive spending. Sales of the Ford Fusion were 19,786, Ford Flex sales were 4,305 and sales of the company's hybrid vehicles totaled 3,906, all records, and Lincoln reported a 2% increase in sales.

Nevertheless, Ford announced a new summer merchandising program, saying that this month it will cover up to three months' worth of payments, up to $2,100, while Ford Credit will offer 0% financing on select vehicles.

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