Ford's 2013 Fusion Is a Game Changer

It's been a long time since any analyst could seriously say a Ford (NYSE: F  ) vehicle could compete with one of rivals Toyota (NYSE: TM  ) or Honda (NYSE: HMC  )  in terms of quality and value. That's what makes the Fusion a welcome addition to the world in 2013 – finally there's a domestic vehicle that can compete. It's clear by looking at the numbers that the Fusion is taking market share away from Toyota's Camry; that's great news as long as it continues to deliver on quality and value. Let's take a look at what critics have to say, how it's selling, and what it means for Ford as an investment.

Critics
The Fusion beat out five other models from Toyota, Mazda, and Dodge to take home this year's "Green Car of the Year" award from the Los Angeles Auto Show. Kelley Blue Book called this year's Fusion the "Best Redesigned Vehicle" of the year, noting that its style hints from Ford's previously owned Aston-Martin brand is refreshing in a typically bland segment. U.S. News & World Report crowned the Fusion with the 2013 "Best Cars for Families" award and it has won the best mid-size car category for three straight years. In addition, U.S. News dubbed Ford's ride the "Best Car for the Money" giving it credibility to compete on terms of value – a welcome change for Ford buyers.

Sales
Toyota's Camry has long dominated the segment but Ford's Fusion is clearly taking market share away recently. To get a better idea of how the gap has been closed, look at the graph below:

 

While Toyota seemingly bounced back last year, the story isn't the same five months into 2013. The Camry still has sold more vehicles but is down 6.8% in sales compared to last year. Meanwhile, the Fusion is up 25.4% compared to last year – closing the gap even further. 

Why it's important
If you're a Ford investor, or potentially one, you already know that the most important segment is full-size trucks because it brings home the profits. That said, the Fusion is part of what Ford calls the "super segment", a combination of the subcompact, compact, midsize sedan, and small utility segments. Consider that those segments accounted for 35% of vehicle sales in 2004 but now represent more than half. Looking toward the future trends, where consumers are anticipated to continue to downsize vehicles, Ford expects market growth to surge in this "super segment". Ford is focusing its efforts there with newly designed or refreshed models and the result should improve the company's top-line revenue and sales figures.

Bottom line
I think the 2013 is a game changer, and not just because it has the potential to capture the Camry's leading position, but because it represents the change Ford has made as a company. Ford recognized it would no longer be a profitable company that warranted our investing dollars with the vehicles it produced 10 years ago. Since then, its efforts have created a lean operation to improve profitability and is now producing vehicles that can compete with its Japanese rivals. The Fusion represents those two points exactly. Ford announced that its Fusion production plants are running at 114% capacity, and that it plans to add more capacity as soon as this summer. When that happens, look for the Fusion to bring home even higher sales numbers – much to the delight of Ford investors.

The best investing approach is to choose great companies and stick with them for the long term. The Motley Fool's free report "3 Stocks That Will Help You Retire Rich" names stocks that could help you build long-term wealth and retire well, along with some winning wealth-building strategies that every investor should be aware of. Click here now to keep reading.


Read/Post Comments (17) | Recommend This Article (5)

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.

  • Report this Comment On May 28, 2013, at 11:07 AM, HgldrFool wrote:

    The Ford Fusion was the most annoying car I have ever rented. Here's some facts about the cheap electronics pawned off as expensive "features":

    -An auto dimming mirror which does not dim at all; you have to tolerate someones brights in your eyes because there is no simple lever to simply switch it. You have to wait and wait and wait for it to finally dim.

    - Extremely slow seat motor - 12 whole seconds to wait and wait and wait to move the seat instead of the one second it takes to quickly move the seat with a mechanical lever.

    - 9 button presses and menus to go through to change the bass on the radio when your trying to drive and watch out for that truck. Who wants THAT? That's a "feature"?

    There's more but no room left in this post.

  • Report this Comment On May 28, 2013, at 11:23 AM, ponchoman49 wrote:

    Anything but have to look at yet more dreary Camry's on the road all day!

  • Report this Comment On May 28, 2013, at 11:27 AM, kyledomino wrote:

    I rented a 2013 Fusion from Hertz and I commented loudly at the time that this was the best new car I had driven in years! Ford has used styling cues from when they owned Aston Martin in the design and it looks great. While there are many variations in the model line up, this one was loaded with all options. Ford has a winner here!

  • Report this Comment On May 28, 2013, at 11:39 AM, TMFTwoCoins wrote:

    @HgldrFool

    Interesting points, I wonder if it would be different had you not been using a cheaper fleet vehicle? Maybe not.

    Those seem like minor, but still relevant, issues. I'll be interested to check more reviews and see if those come up.

    @ponchoman49 and kyledomino

    Agreed on all accounts

  • Report this Comment On May 28, 2013, at 11:40 AM, Cody700 wrote:

    Its comical reading some of the negative remarks about this great car. In order to pass along a comment it should be necessary to have a clue what you are talking about. The negative posts above are full of ignorance. On a brighter note, it is great that a Domestic car is considered equal or better than an import. That has been a long time coming.

  • Report this Comment On May 28, 2013, at 12:01 PM, mistacy wrote:

    Here is a lie caught within 2 sentences: "An auto dimming mirror which does not dim at all ... You have to wait and wait and wait for it to finally dim."

    You say it doesn't dim at all, then say it does.

    Very credible comment on your part to start with.

    Ford in-car-computer products are known to be user unfriendly. You bring nothing new to the table with your comment.

    If you have time to time the seat motor, you probably have plenty of time on your own, & don't know what to do with it.

    Hence, you spend your time writing a rant on this post.

    "There is more, but no room left on this post" ?

    You show your lazy self too.

    Why would we give credit to your statements if on top of it you don't even do what it takes to back your "facts" (e.g. opinion) up.

    I took the time to write this because you are wasting every ones time with your post.

    See the irony...

    Like others have already said, Ford's turn around is going to be taught in business schools for some time. The fusion, with its pros & cons, is undeniably an ace & Ford is playing its cards better & better. Another couple years should see the company in a fantastic position WORLDWIDE.

  • Report this Comment On May 28, 2013, at 12:19 PM, dwduke wrote:

    Ford didn't go to D.C. with hat in hand and deserves kudos for that. The Fusion is a cool little car and will get better as time goes on. Ford pickups are the best period. Ford stands to take market share from every manufacturer on the planet.

  • Report this Comment On May 28, 2013, at 12:22 PM, TMFTwoCoins wrote:

    @mistacy

    Bring out the burn party, cause you just torched the poor fella!

    @dwduke

    Totally agree

  • Report this Comment On May 28, 2013, at 12:29 PM, wscarp1 wrote:

    Ford does seem to have hit the mark with the Fusion though it needs to increase the optional power by about 30 horsepower. I think this article is right that it will be all about value and reliability if the Fusion's gains are to be lasting.

    Ford's efforts to revive the Lincoln brand is another matter. The Lincoln MKZ for example, does look different than a Fusion, upon which it's based, but it's loaded price of over $51,000.00 is ridiculous.

  • Report this Comment On May 28, 2013, at 12:29 PM, mistacy wrote:

    @TMFTwoCoins

    ;)

  • Report this Comment On May 28, 2013, at 12:39 PM, CluckChicken wrote:

    @HgldrFool - Make comments to Ford about the mirror. I first had an auto dim mirror in a 2000 Impala and it was kind of slow to dim but my 2009 CTS has a quicker and more sensitive version.

    "- 9 button presses and menus to go through to change the bass on the radio when your trying to drive and watch out for that truck. Who wants THAT? That's a "feature"?"

    Just wait till everything is touch screen. I like all the things that can be done with a touch screen but I really like that I can operate all the various radio and climate controls by the feel of the buttons alone.

  • Report this Comment On May 28, 2013, at 1:03 PM, gmoore72 wrote:

    I really don't need a car that: checks email, checks Facebook, has a rear-mounted camera, has touch screen, has DVD players, senses what mood I'm in, has voice activated anything, supports any kind of satellite technology, or that has an onboard computer comparable with the office mainframe. The trifecta of reliable, affordable, and good gas mileage would be nice.

  • Report this Comment On May 28, 2013, at 2:43 PM, km4hr wrote:

    I bought a new car recently. I looked and the Fusion but bought a no-frills Camry. The overall quality and value of Camry was just not matched anywhere else. Sort of wish I had looked at the new Mazda6 however. That's a nice car. And to think that Mulally sold Fords interest in Mazda. That was a mistake. They'll wish they hadn't done that.

    Ford sold Range Rover also, and now it's a big hit in China. And have you seen the latest Jaguar? Wow! Ford sold that company too.

    In case you can't tell I'm not a Mually worshipper. I think he's made some huge mistakes that will come back to bit he company after he's gone.

  • Report this Comment On May 28, 2013, at 3:46 PM, btc909 wrote:

    Fusion - I hated the tilted up backseats. The look odd. Easy to get in. Fairly comfortable but getting out of this rear seat pit is a chore. Ford needs tighter overall packaging. Does a door really need to be that thick? Seems lazy to me. Camry needs to hit 30MPG combined at least in it's refresh.

  • Report this Comment On May 28, 2013, at 4:10 PM, mistacy wrote:

    @km4hr

    Ford sold Range Rover & Jaguar because they didn't know how to manage & keep up with the brands. Have you seen the Jaguars Ford manufactured? They are the worst Jaguars ever made. That is where Mullaly is a genius. He realized what had to be let go & what had to be kept. Range Rover & Jaguars are doing well now because the brands are well managed & the new designs are phenomenal. At the time Ford owned Range Rover & Jaguars those brands became liabilities instead of being assets. Mullaly did what was right for Ford to stay alive.

  • Report this Comment On May 28, 2013, at 4:19 PM, TMFTwoCoins wrote:

    I agree with mistacy. Although I have long wondered if keeping Jaguar rather than Lincoln would have been a good move. I'm not sure, though. Obviously Ford knows the brand platforms and potential better than I, so Lincoln looks to be the better answer, but I might just look into details for a future article!

  • Report this Comment On May 29, 2013, at 12:35 AM, predfern wrote:

    A recent review of the new Ford Fusion and Mazda 6 concludes that the Mazda 6 is a much better car. Ford owns a large stake in Mazda so for years the two were virtually identical. Now they are going their separate ways. Ford made the mistake of investing all its money in a fancy display that freezes up while Mazda invested in a better interior and more fuel efficient engine.

    http://www.autoguide.com/car-comparisons/2013-ford-fusion-vs...

Add your comment.

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: 2454549, ~/Articles/ArticleHandler.aspx, 12/17/2014 4:46:34 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...


Advertisement