Ford Fusion price premium threatened by increased production

The 2013 Ford Fusion vehicle sits parked on

The 2013 Ford Fusion vehicle sits parked on the test track at the company's Dearborn Development Center in Dearborn, Mich. (Dec. 13, 2012) (Credit: Bloomberg News)

Ford Motor Co. said it’s starting additional production in the U.S. of its Fusion as the family sedan challenges Toyota Motor Corp.’s Camry as the nation’s top-selling car.

The shift of 1,400 new workers at Ford’s assembly plant in Flat Rock, Mich., will boost capacity more than 30 percent, the company said today in a statement. Demand for the car has overwhelmed the only factory where it has been made, in Hermosillo, Mexico.

The increased supply will test the staying power of a more than $2,300 per-sale premium that Fusion has commanded in the U.S. this year over Camry, the market’s best-selling car for the past 11 years and 15 of the last 16. The Fusion is Ford’s best shot at eventually reclaiming the car-sales crown it last held in the 1990s heyday of the Taurus, a model Chief Executive Officer Alan Mulally studied at Boeing Co.


TOOLS: Find a Ford on LI | Shop for a car | Sell your car
MORE: Data: LI's most popular cars | Latest car reviews


“Our share is up significantly, and importantly our share is growing in important trend markets like California,” Mark Fields, Ford’s chief operating officer, said on Bloomberg Television. “The vehicle has a personality.”

The Fusion’s sale surge — 13 percent this year through July — has cut a quarter of Camry’s sales lead, demonstrated how much consumers care about attractive design and shown how aggressively U.S. carmakers can now compete in all segments.

Ford’s Hermosillo plant couldn’t make more than about 350,000 Fusions and Lincoln MKZ sedans annually, according to LMC Automotive. The Flat Rock factory, which has been building only Mustang sports cars, will be able to produce as many as 100,000 more Fusions a year, LMC said.

The availability of Fusion in North America will rise to as much as 350,000 cars annually, according to Dearborn, Mich.-based Ford.

Higher Prices

The average price Fusion has sold for this year through July rose 5.8 percent to $26,343, behind only Volkswagen AG’s Passat among mid-size cars, according to Kelley Blue Book.

Fusions are selling at a premium of $1,176 to the segment average and $2,378 above Toyota City, Japan-based Toyota’s Camry, which ranks No. 11 in segment pricing this year, behind entries such as Chrysler Group LLC’s 200 sedan, said the researcher, which includes some incentives in its analysis.

Camry’s average prices have fallen 2 percent to $23,965, and the car has slipped from ranking eighth in the segment a year ago.

Meanwhile, Ford shares gained 24 percent this year through Aug. 28 as the Standard & Poor’s 500 Index advanced 15 percent.

California Boost

The added Fusion output draws Ford closer to production levels that Toyota and Honda Motor Co. reach with their Camry and Accord. It also positions the No. 2 U.S. automaker to continue growing in coastal states that were long a source of weakness.

In California, a state that has given U.S.-based carmakers fits for years, the Ford brand’s 18 percent jump in light-vehicle sales during the year’s first half put the marque within 0.1 percentage point of the Honda brand’s market share, according to the California New Car Dealers Association.

“With its bold design and great fuel economy, Fusion has exceeded all of our expectations, with demand outstripping supply,” Joe Hinrichs, the company’s president of the Americas, said in a statement.

Fusion is a standout among Detroit’s most competitive set of cars in a generation. The model’s redesign has drawn comparisons to Aston Martin styling. General Motors Co.’s Chevrolet Impala last month received the highest rating from Consumer Reports among all sedans, a first in at least 20 years for a U.S. carmaker to have outscored all Japanese and European competitors in that segment.

“There’s no doubt the Detroit Three have made fantastic progress,” Mark Hogan, who in March was the first American to be appointed as an outside director to Toyota’s board, told reporters yesterday in Ypsilanti, Mich. “Toyota loves the competition and we’ll keep getting better and better, too.”

advertisement | advertise on newsday

Newsday Cars Twitter

advertisement | advertise on newsday

Top Jobs