March Midsize Sedan Sales

[old_fairmont_wagon]

Mercury also bills itself as being a somewhat more premium brand than Ford. One thing that makes a car premium is the engine under the hood. The base engine can be two hamsters in a wheel for all most people care, but for someone selecting the v6 on the option list, they normally care about its ability to perform. so, for a quasi premium brand, metro though it may be, the v6's specs are important.

 

In a sane world, the PIP d30 would be more than enough for most people, but we don't live in that world. We live in a world with a HP race going on in the bread and butter midsized sedan market.

 

As for having the introduction of another V6 line into the assembly line at hermisillo messing with the economies of scale. Why? Isn't that plant a flex plant to make product variations LESS of a pain in the ass and pocketbook? Isn't the D30 supposed to be disappearing sooner or later? The numbers for the Milan aren't that massive, so, its not like its going to affect d35 availability that much. Lincoln is getting their own D37 soon, or so we've been told here by those in the know. Won't this INCREASE economies of scale for that engine, allowing Lincoln to make more money off of it?

 

My plan keeps internal demand for the D35 relatively flat, or relieves it for other vehicles that will be using it soon (flex for one) (sales numbers for the Milan and MkZ aren't that far off and many Milans are I4s).

It increases volume on the D37L, which can only reduce its cost per unit of production.

It marginally reduces the demand for the PIP D30. But, given that its still going to be in the fusion, and will also now go in the Escape (as someone else has mentioned being a probability), that demand won't be too disrupted either as, again, Milan v6 volume isn't exactly huge.

 

So, IMHO, it doesn't hurt the economies of scale much. Hermisillo is already building CD3 cars with two different V6s and one I4. Soon, it looks like it will have two I4s (one will be a GTDI 2.0L) and two v6s (D35 and PIP D30). So, throwing another V6 in there shouldn't be too much of a stretch.

[NickF1011]

But it's not tearing up the sales charts, either. The 3.5L V6 is what the competition has, and it's what Ford should have to be competitive.

 

Word is the next gen Mazda6 will use the 3.5 also. That's just shameful if Ford sticks with the 3.0 at that point.

 

The 3.0 is ACCEPTABLE in my '04 Mazda6. But it's only really acceptable for 2 reasons: Mine has a 5-speed, and it's a slightly smaller car than the Fusion. With an automatic that thing would feel like a turd. It has absolutely no low end torque at all.

Edited April 6, 2007 by NickF1011

[Harley Lover]

Don't you guys think that the most logical plan for the Ford would be to put the 3.5 V6 in the Fusion at the same time that the 3.7 V6 is introduced for Lincoln? It makes sense to me for Ford to follow this game plan in order to allow Lincoln to have a bespoke version of the engine.

[Biker16]

It would be stupid to build anywhere besides Hermosillo.

why is that?

[Biker16]

Don't you guys think that the most logical plan for the Ford would be to put the 3.5 V6 in the Fusion at the same time that the 3.7 V6 is introduced for Lincoln? It makes sense to me for Ford to follow this game plan in order to allow Lincoln to have a bespoke version of the engine.

will the longer V6 fit between the Strut towers of these cars? rememebr the Edge use the more compact strut design, while the fusion uses the Double wishbone design.

[NLPRacing]

It would be stupid to build anywhere besides Hermosillo.

 

They could build them in China...

[NickF1011]

will the longer V6 fit between the Strut towers of these cars? rememebr the Edge use the more compact strut design, while the fusion uses the Double wishbone design.

 

Longer V6? From my understanding, the outside dimensions of the 3.5 are virtually identical to the 3.0, save for some deck height. And the 3.5 fits in the MKZ without any problem. There's absolutely zero issue with fitment of the 3.5 into any CD3.

[Biker16]

Because Ford invested $2 Billion dollars into the plant in order for Hermosillo to have the capacity. The suppliers have set up a supplier park. It would be expensive to totally move it now.

why can't we add a few unbits to a plant like OAP, AAPor Wayne? you don't need a supplier park to make cars.

[RichardJensen]

Ford is not going to be assembling the Fusion at other plants, not anytime (IMO) during the next 5 years. Doing so reduces per unit profitability and creates a larger supply footprint that may be less sustainable as time goes by.

 

Adding capacity to any product will be done after (and only after) Ford has fully redeveloped its lineup; only when Ford has a bulletproof array of products, and a solid reputation, will the subject of expansion be broached.

 

There is no point in wasting resources to build more Fusions when you have plants that aren't flexible, and platforms that aren't competitive. There's no point in spending money to build more Fusions, or Flexes, or Edges, until you have integrated your global engineering programs.

 

Mulally made a very interesting point at the investors conference, and one which no reporter picked up on. Apparently no two Ford product lines have the same hood hinge. From the Panther to the E-Series to the Focus, no two vehicle lines share something this basic.

 

While you still have this amount of waste, you should not be adding product capacity. That's the least of your worries.

[RichardJensen]

Your not adding, your utilizing current capacity.

No. You're adding capacity for the Fusion.

 

It would take engineering resources to do this, it would take logistical personnel to do this, and after axing 30% of their white collar staff, there are other more important tasks for these people.

Edited April 8, 2007 by RichardJensen

[Bluecon]

They should be able to make 30k a month on 3 shifts. They are not at capacity in the Mexican plant.

[rkisler]

Capacity at Hermosillo is 305,000 a year with three shifts. Divided among three cars that are being shipped to South America as well, I think they are pretty much maxed out.

Pioneer,

 

I think there is still some room in Hermosillo. Looking at the sales figues on BON, it looks like last year's sales of the triplets was about 210k in the US. Add 10% for Canada, and maybe 5-10k for Mexico/SA, puts the total volume at around 240-250k. Volume in 2007 could be higher. There is a full year of AWD availability, and a full year of MKZ. More importantly, Taurus won't be in the showroom to compete. In 2008, hybrids will be available, but the volume might be fading somewhat due to product aging.

 

So it looks like volume might be pretty well matched to a single plant 3-crew operation for now.

 

It would take a significant event or events (such as develpment of derivative body styles) to make expansion into another assembly plant worthwhile. Even if Ford were to install a power improved 3L or a 3.5L, or "make the product competitive" I don't think the volume bump would be all that high. Probably more important to this segment is filling in the red reliability circles in CR's annual auto edition. Consistent reliability will build the brand and will help keep residuals high to keep lease rates low.

 

There is no other plant in North America other than Mazda/Ford AAI plant that is facilitized for CD3 production and that plant seems pretty full with 626/Mustang. (CD3s in Oakville (Edge/MKX) is not really related to CD3). Putting CD3 in any other plant would carry a high investment price tag which wouldn't be justified at this point.

[RichardJensen]

'demand' is a rather loose concept to be discussing here.

 

See, do you ever imagine a point in time where Ford dealers just won't have enough Fusions?

 

I don't.

 

Do you imagine a point where Ford dealers will be able to command a price premium for Fusions?

 

I don't.

 

Ergo, I can't foresee a time when 'demand' will necessitate adding capacity.

 

Whether Ford can sell a greater number units into this segment is another question. However, it's not, IMO, a question worth asking.

[rkisler]

Not as high as the original 2 Billion dollar investment into Hermosillo. Some plants would require minimal investment, especially some that have been retooled recently. Ford will be building D3 and CD3 vehicles at OAC beginning with the Flex vehicle. Why can't it work both ways, if demand dictates, the other way in Chicago?

 

Are any of the people disagreeing with me actually reading my whole posts? If demand of the triplets, which I believe will not happen in it's current form, ever escalated to 350k plus, you would not want Ford to build more of them in a FLEX plant? You want Ford to lose out on sales? You would want 50,000 people a year to buy from a competitor, other than building more vehicles? Am I understanding everybody correctly? :shrug:

 

No big disagreement; I hope continued product improvements, long-term durability, and reputation will incease demand enough to result in a capacity expansion. But first I would rather see Hermosillo literally bursting at the seams and making a lot of money.

 

I think it's going to be some time before there are 50k people lined up to buy a CD3 that can't get one. And if they can't, probably 50% of them would find another car or crossover in the Ford/LM showroom. I think it's going to take more like 100k of capacity shortfall to initiate a capacity expansion.

 

As I mentioned in my earlier post, the CD3s platform in Oakville bears very little relationship to CD3, and the sedans could not easily flex into this plant. Nor into Chicago. The only other plant producing CD3's in NA is AAI and there is no room there unless Mustang were to go elsewhere. One serious issue with CD3 plants is the integrated sheetmetal stamping within the plant Although this makes for a very efficient plant operation (versus shipping stampings from a central stamping plant), it is not designed or capacitized to ship sheetmetal stampings outside the plant. Which means another set of stamping dies located elsewhere which is another added expensive.

[silvrsvt]

You keep replying to me like you are disagreeing with me, but in essence, you are agreeing with everything I said.

 

That's what your not getting, I doubt we'll see the demand for the Fusion reach 300-400K units for its nameplate alone. Why worry about it? Ford designed the car to be profitable at 150K or so units. Whatever they make off the car should be reinvested into it to make it better, not make it sell more then that. I'd rather sell 150-175k cars with tight demand, then worry about selling more then that just so that i have a market share #.

 

Have to look at it like this, Ford is being realistic with its predictions. If it has a best seller, like the F-series, its going to protect that sales leadership. Where it doesn't have leadership, say in the mid-size market where the Accord and Camry rule, they will look at their numbers, say we can sell X amount of cars profitably and keep it at that. People's expectations of the Fusion is much like expecting the Tundra to overtake F-series sales! It won't happen over night, but will take 10 years or so to do...which is an eternity in the auto biz.