These 2 Domestic Cars Changed the Game for Ford and General Motors

These two vehicles are reviving Ford and General Motors in segments they were once left for dead in.

Feb 8, 2014 at 11:00AM

It wasn't too long ago that Detroit's two largest automakers were known for large trucks and SUVs while they pumped out less valuable car models to keep production levels up. It was a move that severely hurt their respective brand images. The word "game-changer" is often overused, especially in the media. However, every now and then a product really does change the way consumers see a brand or industry – and that's exactly what Ford (NYSE:F) and General Motors (NYSE:GM) have accomplished with their Fusion and Impala sedans.

Ford's 2014 Fusion. Source: Ford motor company.

Fusion is stunning
Toyota's Camry has long been king of a key American vehicle segment: mid-size sedans. It's a segment that boasts incredible sales with fierce competition between many models that offer great fuel economy and solid value -- something Detroit automakers haven't always been known for. A decade ago, Ford was as close to competing with Toyota's Camry as I am to competing with Usain Bolt. Not very close at all. However, Ford redesigned its Fusion under its new "One Ford" strategy that focused on improving quality, fuel economy, and appearance. The result was stunning, and sales quickly took a bite out of the Camry's success.

Graph by author. Source: company sales reports.

"My design brief to the team was to do an absolute drop-dead gorgeous head-turner," said J. Mays, Ford's head of global design, according to the Detroit Free Press. "And it was to look $10,000-$15,000 more expensive than it is."

Judging by its list of awards, it appears Ford's team accomplished its goal.

  • U.S. News and World Report's "Best Car for the Money."
  • 2013 "Green Car of the Year" award from the Los Angeles Auto Show.
  • Kelley Blue Book's "Best Redesigned Vehicle" of the year.
  • U.S. News and World Report's 2013 "Best Cars for Families."
  • U.S. News and World Report's "Best Mid-Size Car" (for three straight years).

Kelly Blue Book also ranked the Fusion second place for its 2013 Best Resale Value Award, a big change from the sedans Ford produced a decade ago. One of the biggest reasons Ford's Fusion has been a hit, aside from its more aggressive exterior, is the EcoBoost engine. The turbocharged engine option has resonated with consumers looking for performance and better fuel economy, and more than half of Fusion's sold have an EcoBoost under the hood. This year the Fusion will probably break 300,000 sales, which only one other Ford vehicle has done in nearly a decade -- America's best-selling truck, the F-150.

Ford's fusion has been a success on many levels; however, Chevy's Impala has done something no other Detroit vehicle has in a long time.

2014 Chevy Impala. Source: General Motors.

Impala is on top
Consumer Reports magazine has been praising domestic automakers more recently and named General Motors' Chevrolet Impala its top-ranking sedan. If you're keeping track, that makes it the first American vehicle to win the sedan's top rank in 20 years -- a huge victory for GM.

"The Impala's performance is one more indicator of an emerging domestic renaissance," says Jake Fisher, director of Consumer Reports automotive testing, in a statement, according to USA Today. "We've seen a number of redesigned American models -- including the Chrysler 300, Ford Escape and Fusion, and Jeep Grand Cherokee -- deliver world-class performance in our tests.

GM still has an uphill battle to fight with consumers after its brand image took a hit during its financial collapse and bankruptcy. However, it's taking necessary steps to improve its vehicles for the long term and is replacing, refreshing, or redesigning 90% of its entire vehicle lineup by the end of 2016 -- the company's most aggressive portfolio turnover, ever.

If the Impala is a preview of what other redesigns will become, import brands beware. The Impala's previous score in the Consumer Reports survey was 63 out of 100, and the recent score jumped to 95 out of 100. It received the high marks for its drastically improved and comfy ride, as well as better handling and spacious cabin. As fuel economy continues to improve with bigger vehicles, Chevy's large sedan could steal market share from the mid-size sedan market, which would make the Impala an even bigger hit.

Ultimately, both of these vehicles have helped Ford and General Motors gain back some market share in segments they were once left for dead in -- these two vehicles are company game-changers. 

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Daniel Miller owns shares of Ford and General Motors. The Motley Fool recommends Ford and General Motors and owns shares of 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.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.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.

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