While the overall numbers for Fusion sales are impressive, they do not tell the full story. As Ken Czubay, Ford’s vice president of U.S. sales and service, stated on the company’s sales conference call: “Fusion is achieving strong momentum in markets where our share has historically been lower, such as Florida.” He also noted that Fusion sales more than doubled year over year in the Los Angeles and San Francisco metro areas, and is turning at the fastest rate in California, a market that has typically been weak for the Detroit Three. By bringing new customers into Ford dealerships, the Fusion will probably contribute to the brand’s overall momentum in these critical domestic markets, creating a “halo effect.”
Ford has been planning to ramp up Fusion production in 2013, and the strong sales pace over the past two months suggests that there would be a market for additional supply. Ford is investing over $500 million in its Flat Rock Assembly Plant and adding a second shift (and 1200 jobs) to begin production of the Ford Fusion there. (Thus far, the Fusion has only been produced at Ford’s plant in Hermosillo, Mexico.) Production of the Fusion at Flat Rock is expected to begin in July.
With a second source of supply for the Fusion, Ford will have the capacity necessary to chase the Camry for the top spot in the midsize car segment. Moreover, the Fusion probably has what it takes to overtake Camry from a quality and value perspective. U.S. News and World Report ranked the 2013 Fusion as the best midsize car for the money and the 2013 Fusion Hybrid as the best hybrid car for the money. Reviews of the new Fusion have generally been quite positive, and its more aggressive styling (compared to the conservative designs of its Japanese peers) could be an important draw as well.
The Ford Escape is already a segment leader, but the new Fusion’s success is more impressive, as the midsize segment has been dominated by the Japanese automakers for a long time. Ford’s success in this critical segment offers proof that Detroit automakers can finally compete with foreign competitors across the full spectrum of cars, trucks, and SUVs. Over time, this should boost Ford’s market share, while reducing its reliance on the F-Series trucks to generate profit.
The article Ford’s New Models Are Hitting Their Stride originally appeared on Fool.com and is written by Adam Levine-Weinberg.
Fool contributor Adam Levine-Weinberg has no position in any stocks mentioned. The Motley Fool recommends Ford. The Motley Fool owns shares of Ford.
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