Ford Fusion was the right car at the wrong time

Editor’s note: This story will be part of a special report on the decline of U.S. car sales, to be published in the July 2 edition of Automotive News. 

DETROIT — Not since 1996 has the top-selling car in America come from a domestic brand. In 2012, it finally looked like Ford Motor Co. had an answer to the Japanese automakers’ dominance of the segment.

Knowing it had a potential hit on its hands, Ford marked the arrival of its second-generation Fusion with an elaborate celebration in New York’s Times Square and “American Idol” host Ryan Seacrest.

Ford touted the hybrid version’s 47 mpg rating, but would-be customers were most impressed with the Fusion’s handsome, aggressive styling, a bold departure from the traditional view of the enormous midsize sedan segment as bland family-haulers.

“When that car came out, it looked like an Aston Martin,” recalled Jim Seavitt, owner of Village Ford in Dearborn, Mich.

Only six years later, the Fusion is headed for the scrap heap — at least in its current form. Ford announced in April it would discontinue all sedans in North America as its lineup evolves to virtually all crossovers, SUVs, pickups and vans.

The Fusion’s impending demise comes as a white flag from Ford in a segment Detroit had long been desperate to reconquer. But it’s also a proclamation that winning the midsize segment no longer matters nearly as much as the profits pouring in from its pickup and utility vehicles.

U.S. Fusion sales topped 300,000 in both 2014 and 2015, territory that domestic cars hadn’t touched for many years. But it never managed to loosen the iron grip Toyota, Honda and Nissan had atop the segment. Coupled with the buyers’ shift to crossovers and SUVs, Ford decided the Fusion wasn’t worth saving, despite the brand equity it had built up over more than a decade.

“As good of a product as Fusion has been for us, that C-D segment has declined dramatically, in breathtaking fashion, and it’s accelerated over the past couple years,” Mark LaNeve, Ford’s vice president of U.S. marketing, sales and service, told Automotive News.

“We’re going to have products that are new silhouettes that blur the lines between what you think of as a sedan today and a crossover today. We don’t have any plans today, but could Fusion re-enter the market? It’s certainly a possibility.”

Mark LaNeve, Ford’s vice president of U.S. marketing, sales and service

Sales of the Fusion peaked at 306,860 in 2014, according to the Automotive News Data Center. They’ve fallen every year since, to 209,623 in 2017.

That still hasn’t stopped dealers from imploring Ford management to keep the Fusion name, an idea the company seems open to, potentially as a crossover-styled vehicle after 2021. While Ford has given end-of-production dates for its Taurus and Fiesta, it has been mum on the Fusion, and just this month introduced a new Fusion police hybrid vehicle.

“We’re going to have products that are new silhouettes that blur the lines between what you think of as a sedan today and a crossover today,” LaNeve said. “We don’t have any plans today, but could Fusion re-enter the market? It’s certainly a possibility.”

‘Brought sexy back’

The Fusion debuted in 2005 as a replacement for the venerable Taurus, which was discontinued in 2006 after degenerating into an unloved rental-lot staple (although Ford CEO Alan Mulally resurrected the Taurus name a year later for the company’s full-size sedan). The midsize Fusion was meant to anchor the automaker’s new lineup of fuel-efficient family sedans.

Its popularity grew when Ford began racing Fusions in NASCAR in 2006, and sales surpassed the 200,000 mark in 2010, an important bright spot as Ford was recovering from the dark days of the recession.

The second generation of the Mexico-built car was so popular, Ford expanded production to Michigan in 2013. The MSNBC show “Morning Joe” broadcast live from the Flat Rock Assembly Plant in suburban Detroit the morning Ford started Fusion production there, highlighting the U.S. jobs that the Fusion’s success had created.

While it never quite overtook the Toyota Camry, Honda Accord or Nissan Altima, the Fusion competed well, making solid inroads in coastal cities such as New York, Miami and Los Angeles. A 2015 Ford news release declared that the Fusion had “brought sexy back” to the midsize segment.

Just two years ago, the Fusion was Ford’s centerpiece at the Detroit auto show display, when it brought back Seacrest to tout the car’s midcycle freshening.

“It had a lot of positives,” said Dave Sullivan, an analyst with AutoPacific. “The styling of it turned heads when it came out, and it was one of Ford’s truly big global sedans. It just didn’t exactly prove to be what American buyers wanted.”

The Fusion’s decline was hardly its own fault.

As gasoline prices fell, demand for utilities and pickups surged. That was a welcome development for Ford, which makes most of its profits from those larger vehicles, but the business case for a third-generation Fusion became much tougher to justify.

Ford ended U.S. production of the Fusion in 2016, after it became clear the lower-cost factory in Hermosillo, Mexico, could make more than enough to meet demand.

Suppliers were informed late last year that plans for a 2021 redesign had been canceled.

Hackett: Trucks closing gap on mpg is key

Ford wouldn’t confirm the news for four more months, but CEO Jim Hackett in December gave hints as to why Ford was comfortable letting go.

Vehicles such as the Fusion had for years been an alternative to gas-guzzling SUVs. But now, thanks to powertrain advancements, automakers are “starting to crack that code” and close the fuel economy gap, he said.

“The reasons for the balance in history had more to do with fuel than customer preference,” Hackett said. “And so, if you can get rid of the difference there because of fuel, you start to relieve the pressure of what kind of portfolio you have to have.”

Even in recent years, the Fusion has stood out from the competition. It finished 2017 still behind Japan’s midsize trio but beat out the Chevrolet Malibu by nearly 25,000 units.

If dealers’ wishes come true and the nameplate sticks around in some fashion, Sullivan suggested it could likely be similar to a Buick Regal TourX wagon.

“That’s your new family sedan,” Sullivan said. “It’s just not what we’ve traditionally known.”

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