Ford's Latest Bold Move

From the perspective of last week, there was absolutely nothing wrong with the 2012 version of Ford's (NYSE: F  ) popular Fusion sedan. The midsized mainstay had seen its sales grow solidly over the past few years -- largely at the expense of the longtime segment mainstays, the Toyota (NYSE: TM  ) Camry and Honda (NYSE: HMC  ) Accord.

In fact, despite being a few years old, the Fusion had its best sales year ever in 2011, ranking third in U.S. car sales behind the Camry and Nissan's Altima.

But that was last week.

On Monday, Ford took the wraps off its new Fusion -- and as was widely rumored, it's visually stunning, a stylistic home run reminiscent of sleek ultra-luxury Aston Martin coupes. But it's not just a pretty face: Ford's new Fusion comes with a big surprise -- one that might turn out to be a game-changer.

A welcome failure to play it safe
Automakers don't typically reinvent their best-selling vehicles from generation to generation. Look at the last few Camrys and you'll see a series of minor styling tweaks and incremental improvements over time -- but the current car isn't that different from the one Toyota was selling a decade ago.

The new Fusion, though, expands on the best features of the current model while breaking with it in several ways. The car's look is striking and dramatic, its lines a departure from recent Ford practice that other models are expected to follow in coming years -- and one that will be seen around the world, as this car, like the Fiesta and Focus, will be a global model. The hybrid version is expected to get 47 mpg -- a solid improvement on the current Fusion Hybrid's 41, and high enough to beat the latest hybrid entries from Toyota, Hyundai, and Kia.

And in a surprise, there's a full-blown plug-in hybrid version, dubbed the Fusion Energi, set to debut later this year. Ford says that it expects the Fusion Energi's "miles per gallon equivalent," an EPA standard rating used for cars that can run entirely on electricity, to exceed those of General Motors' (NYSE: GM  ) Chevy Volt and the plug-in version of the Toyota Prius.

Ford has so far been coy about details like the Fusion Energi's pricing and range, not surprising for a model that won't hit dealers for almost a year, but an aggressively priced plug-in entry in this class could end up being quite popular.

But while we won't know for sure until on-road reviews (and initial sales numbers) start to roll in, I think the new Fusion is likely to be quite popular no matter what.

A bold step forward in a conservative segment
With the new Fusion (and its overseas twin, called the Mondeo), Ford looks set to gain more sales ground on the Camry and Accord, both of which suddenly look a little stale in comparison. While the Accord is in fact somewhat stale -- Honda, which is scrambling to perk up its product line, has hinted that a new version will arrive late this year -- the latest edition of Toyota's Camry is only a few months old.

But that doesn't mean that gains will be easy for Ford to find. Despite its incremental, evolutionary design, the new Camry is selling quite well so far -- and strong entries in the segment from Hyundai and Kia, a renewed effort from Volkswagen, and GM's refreshed Chevy Malibu will add to the competitive pressures on the Fusion.

But as last year's two new Fords -- the Explorer and Focus -- have shown, the Blue Oval's recent products can compete with just about anyone on quality, value, and fuel efficiency. Add in class-leading "infotainment" features and bold styling, and Ford may have another hit product on its hands.

Ford's dividend will be back in a few months, but you don't have to wait to put the power of reinvested dividends to work in your portfolio. In a special new report, Motley Fool analysts identify "11 Rock-Solid Dividend Stocks," all great additions to a long-term investor's portfolio. This new report is completely free for Fool readers -- get instant access.

Fool contributor John Rosevear owns shares of Ford and General Motors. You can follow his auto-related musings on Twitter, where he goes by @jrosevear. The Motley Fool owns shares of Ford. Motley Fool newsletter services have recommended buying shares of Ford and General Motors and creating a synthetic long position in Ford. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


Read/Post Comments (0) | Recommend This Article (11)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1754984, ~/Articles/ArticleHandler.aspx, 10/22/2014 6:01:52 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 16,461.32 -153.49 -0.92%
S&P 500 1,927.11 -14.17 -0.73%
NASD 4,382.85 -36.63 -0.83%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/22/2014 4:00 PM
F $14.13 Down -0.13 -0.91%
Ford CAPS Rating: ****
GM $31.31 Up +0.47 +1.52%
General Motors CAPS Rating: **
HMC $31.62 Up +0.07 +0.22%
Honda Motor Co., L… CAPS Rating: ****
TM $112.27 Down -1.08 -0.95%
Toyota Motor Corp… CAPS Rating: ***

Advertisement