Ford Fusion, behind coastal surge, poised to challenge Japan's Big 3

Ford now can build more than 400,000 Fusions a year, putting it closer to Toyota's U.S. production capacity of 460,000 Camrys.
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DETROIT (Bloomberg) -- In style-savvy Miami, Detroit cars used to be a hard sell. Not anymore, says Ford dealer Victor Benitez, who is having a hard time keeping up with demand for the Fusion sedan.

"We are in a very hip market where people want to be driving the latest and the best," said Benitez, who has seen sales more than double at his two Miami-area Ford stores this year. "The Fusion not only performs well, but it looks good. We're trading people from Toyotas and Hondas."

The Fusion -- Ford Motor Co.'s hottest car since Taurus was America's top seller two decades ago -- is going coastal. Already a hit in the heartland, Fusion now attracts buyers in places that previously panned Detroit iron.

Fusion sales more than doubled in New York and San Francisco last month, while rising 62 percent in Miami and 77 percent in Los Angeles. Chic car shoppers compare it to Aston Martin, James Bond's car.

"We're seeing some of our fastest retail sales growth for Fusion on the coasts," said John Felice, U.S. sales chief for Ford. "Dealers on the coasts have been very pleased."

Nationwide, Fusion's 71 percent sales surge last month helped drive up Ford's total sales 14 percent. The automaker sold more Fusions in the first 10 months of the year than it did in all of 2012.

Camry sales fell 3 percent last month, despite Toyota Motor Corp. offering free financing and other discounts on its flagship sedan. For the year, Toyota has sold 348,134 Camrys, up 1 percent, while Ford has sold 248,033 Fusions, up 20 percent.

Reclaiming space

Ford's hot-selling family car has become the standard-bearer for domestic automakers accelerating from reckoning to revival by creating their best cars in a generation.

General Motors' sales rose 16 percent last month, while Chrysler Group volume jumped 11 percent.

"The Fusion could be seen as Detroit reclaiming its space in the mid-size car segment," said Jeff Schuster, an analyst with researcher LMC Automotive in Troy, Mich. "It shows that Detroit can be competitive in a highly competitive segment dominated by Japanese brands."

In late August, Ford started building Fusion at a second factory, in Flat Rock, Mich., putting more pressure on Camry, the top-selling car in the United States for the last 11 years.

Ford now can build more than 400,000 Fusions a year, putting it closer to Toyota's U.S. production capacity of 460,000 Camrys, according LMC Automotive.

Extra capacity

"Ford now has additional capacity to expand on the coasts and elsewhere," Schuster said. "They've got everyone looking closely in their rearview mirror at the Fusion, which is really gaining ground."

The extra Fusion production is a "big plus," that puts Ford in position for further gains in November and December, Ford's Felice said.

Ford could also benefit from Consumer Reports' decision last month to remove its long-standing recommendation of the Camry because it didn't fare well in new crash tests by the Insurance Institute for Highway Safety.

Camry leads Honda Motor Co.'s Accord by 40,870 and Nissan Motor Co.'s Altima by 76,831 this year through October.

Honda's Accord is cutting into Camry's sales in California more so than Fusion, said Bill Fay, group vice president of Toyota brand sales.

Camry, Accord

"Accord is our primary competitor out here," Fay said. "We get more cross-shopped with Accord than we do with Fusion."

In keeping with Fusion's luxury looks, Ford said buyers are loading the car with options such as voice-activated controls and dashboard touchscreens.

That drove Fusion's average selling price up 4 percent to $27,444 last month, according to auto researcher Kelley Blue Book.

Camry's average price fell 1.3 percent to $24,193, according to the Irvine, Calif.-based auto researcher.

"When we take someone coming from a Toyota or a Honda, we show them the Microsoft Sync technology," Miami Ford dealer Benitez said of the Fusion's voice-activated and touchscreen systems. "We refer to it as a smart car, the same way you have a smartphone."

This year, Fusion probably will claim 12 percent of the mid-sized car market, up from 10 percent last year, according to LMC's estimates.

The Camry may fall to 16.7 percent of the segment, from 16.9 percent last year, Schuster said.

"The Fusion is not a new model anymore," Schuster said. "And yet it still is making new inroads."

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