Finally the stock market has taken notice of the improvements CEO Alan Mulally and team have made at Ford Motor Company (NYSE:F), sending the stock from its 52-week low of $8.82 a share up to $15 recently. It was welcome news for investors like me who have long known the company’s turnaround and growing potential. Ford’s first-quarter-earnings report noted that North America brought in 11% margins with great sales figures. The good news continues with Fords recent announcement of its plans to expand plant capacity.
By the numbers
According to Ford Motor Company (NYSE:F) it will be adding an additional 200,000 units of annual capacity this year – a long-term move. In a short-term move to improve capacity, Ford is going to shorten its typical summer shutdown for its North American assembly plants. That’s a move that will improve production by 40,000 vehicles over the summer. As far as jobs go, that’s going to add about 3,500 hourly jobs to meet the increased production.
This is great news because the increase of 200,000 vehicles will come from the Chicago, Flat Rock, and Kansas City assembly plants. Those plants happen to produce three of Ford Motor Company (NYSE:F)s most important vehicles: the F-Series, Fusion, and Explorer.
Last month the F-Series posted a strong month with over 59,000 trucks sold – up 19% for the year. Ford considers anything above 50,000 a phenomenal month, and the numbers keep rising. Ford has been running a third shift in some plants, which will help secure strong margins in North America for the second quarter.
The Fusion, which is taking market share from Toyota Motor Corporation (ADR) (NYSE:TM)‘s Camry, had been running plants at 114% capacity to try and match demand. Ford Motor Company (NYSE:F)’s had troubles keeping enough Fusions on dealer lots, and some consumers have been put on a long waiting list. The extra capacity will no doubt be aimed to match production with the Fusion’s demand, and could help boost its sales in the second quarter.
Ford considers the retail segments of subcompact, compact, midsize sedan, and small utility segment to combine for the “super segment”. Led by the Fusion, Ford Motor Company (NYSE:F) has reported its market share in this super segment has increased 28%. That’s a significant increase when compared to the 9% gain by the overall industry.
“Ford’s share has grown this year faster than all other automakers. The driving force behind this is our phenomenal rate of growth in the super segment and our continued success with these key vehicles in the long-dominated Japanese regions of the country,” said Erich Merkle, Ford Motor Company (NYSE:F) U.S. sales analyst. “Once our additional manufacturing capacity on Fusion comes on line, the battle for sales leadership in the midsize segment will tighten considerably.”