Two Plants for 2010 I4 Fusion

[FordBuyer]

If it's true that new 2010 Fusion will get at least 34mpg highway, and there will be hybrid and ST version, then I don't see how Ford can meet demand with one plant that builds two other vehicles in addition to Fusion that is already above 150,000/year sales volume for this year. Figuring that it's not hard to buy I4 Fusion for under $20,000, it seems to me new Fusion should be just as popular as Focus if not more so. IMO, MTP should be second plant for Focus and Fusion. Both will be needed as both are nice fuel sippers for the price. If Ford is to survive on far less truck sales, it will have to get very competitive in car sales and that means production volume also.

[FordBuyer]

If it's true that new 2010 Fusion will get at least 34mpg highway, and there will be hybrid and ST version, then I don't see how Ford can meet demand with one plant that builds two other vehicles in addition to Fusion that is already above 150,000/year sales volume for this year. Figuring that it's not hard to buy I4 Fusion for under $20,000, it seems to me new Fusion should be just as popular as Focus if not more so. IMO, MTP should be second plant for Focus and Fusion. Both will be needed as both are nice fuel sippers for the price. If Ford is to survive on far less truck sales, it will have to get very competitive in car sales and that means production volume also.

 

Sorry I didn't put question mark at end of title. But Ford IMO will need second plant and hopefully a second plant in America will help it meet demand and assure us that Ford is strong to its roots as being American built. They could build the hybrid here, plus a performance version and a hoped for alternative body style like two door coupe or hatchback.

[pcsario]

Fusion barely topped 10k this month, fleet sales included. No need to worry about demand exceeding production.

 

Worst case scenario, base Fusion is going away in 2010, base Focus is finally killed, lineup gets adjusted to make room for the Fiesta.

 

If Ford was smart, they would ditch the base Milan as well, and turn that volume into Hybrid sales.

 

No point in wasting capacity for trims that aren't as profitable.

Edited August 3, 2008 by pcsario

[FordBuyer]

Fusion barely sold more than 10k this month, there's nothing to worry about.

 

Worst case scenario, base Fusion is going away in 2010, base Focus is finally killed, lineup gets a price increase to make room for the Fiesta.

 

If Ford was smart, they would ditch the base Milan as well, and turn that volume into Hybrid sales.

 

No point in wasting capacity for trims that aren't as profitable.

 

Year to year sales are up over 10,000 units and that is a lot of extra vehicles no matter how you cut it. Biggest problem dealers around here have is getting enough of them. '08's are pretty much gone on Metro Detroit Ford lots and only selling '09's same as Focus.

 

AGAIN, if I4 mpg is going from 28mpg to over 34mpg with 20% more horsepower, making 150,000/year will not come close to demand. The new V6 should be around 250 hp and get at least 28mpg highway. That will easily translate into more sales for both Fusion and Milan as that makes these two vehicles very competitive if not best in class in mpg.

[igor]

rofl PC .. that was a god one

 

That said, I do not think there is any capacity contraint on the Fusion besides the I4 production.

With the I4 production in line, and hybrids on sale, we should see some healthy sales - the same goes with the Focus, although there it goes for building more SYNC / SEL/SES models.

 

Igor

[thegeneral]

The new Malibu is already topped 100,000 sales. You now have former truck buyers buying cars now. Ford has plenty of extra factories.

[FordBuyer]

I would rather see this thread end than see it morph into another "Fusion is a failure," or "Malibu is better than Fusion" thread. Again, Fusion sales are up year over year and have been all three years of its existence. And again, the 2010 I4 Fusion will have best in class fuel mileage plus more power and more gears.

[focus05]

I think this could be fixed by sending the MKZ to AAI and build it next to the Mazda6. Both, I think, will be aharing the 3.7 and the MKZ is higher margin and could absorb higher labor costs. Not sure about body/chassis difference that might make it impractical.

 

That would free up 40k-45k units/year at Hermosillo currently dedicated to domestic and international MKZ sales.

 

But Hermosillo, I believe, was designed for 220,000 units/year, two shifts, without overtime. My guess is that overtime could get you to 260,000 without stretching. That would be about 180,000 Fusion units and 40,000 each for the other two. You cut rental units first. I think that would be sufficient for 2009CY. Once Ford has more car capacity, they can use another line somewhere. I've read that the new hybrid system is supposed to be much easier to manufacture than the Escape's system, so I'm not too worried about manufacturing complexity eating into productivity.

[pcsario]

AGAIN, if I4 mpg is going from 28mpg to over 34mpg with 20% more horsepower, making 150,000/year will not come close to demand. The new V6 should be around 250 hp and get at least 28mpg highway. That will easily translate into more sales for both Fusion and Milan as that makes these two vehicles very competitive if not best in class in mpg.

 

Ford should focus on profitability first before wasting capacity on low end trims.

 

Why should they waste billions on a new plant when the demand really isn't there?

 

Sales might have gone up temporarily, but as July's sales proved, it's hardly permanent.

 

New Mazda6 starts @ 19k, Ford should start ditching the Walmart pricing in preparation for the Fundeo, and to just plainly improve their finances. I really don't think they should be thinking about adding capacity just so they can keep selling base models, to keep a plant viable, volume-wise.

 

MKZ is higher margin and could absorb higher labor costs. Not sure about body/chassis difference that might make it impractical.

 

Cost of tooling + higher labor = Significantly decreased profits per unit.

 

They must be making a fortune on each MKZzz considering the circumstances, I wouldn't mess with that yet.

 

They just need to rethink their production mixes.

 

 

rofl PC .. that was a good one

 

Just keeping it real. B)

Edited August 3, 2008 by pcsario

[Pioneer]

But Hermosillo, I believe, was designed for 220,000 units/year, two shifts, without overtime.

 

 

Hermosillo capacity is 305k, three shifts.

[ViperPilot]

Ford should focus on profitability first before wasting capacity on low end trims.

The Flex is hailed as "overpriced" although everyone focuses on the $42G ones and not the low end $30G ones. The same goes for any car, if Ford doesn't keep the base models they price themselves out of reach for a lot of the retail market AND the fleet market. Not everyone is going to be able to afford $8G in extra options, but it's better for Ford to get customers into a lower profit cheaper Fusion than a Hyundai or Kia.

[pcsario]

The difference is barely 1k between trims, the fact that you accept Ford could get as much as 8k more per car says a lot about the difference between both type of buyers.

 

Better to lose a customer to Kia & Hyundai, than Honda or Toyota. Better to have someone looking to spend ~20k on a car, who will value your product, and be impressed enough to be willing to spend a little more, than wasting a unit/sale, volume-wise, on those "flavor of the month" unloyal customers, who are just looking for a bargain, especially when they're the ones who only buy when there's cash on the hood.

 

That's not investing in your future, that's sacrificing dollars for cents.

Edited August 3, 2008 by pcsario

[FordBuyer]

I know I'm getting ahead of the curve here, but I'm betting a $20,000 Fusion SE I4 with more power and extra gear that gets 35mpg highway will sell like hotcakes just like the Focus does now. It's what the market is looking for right now with tight credit and record home foreclosures stretching through 2009. Add in another 25,000 Fusion hybrids and I would bet Fusion sales will explode just like Focus where Ford can't even come close to demand.

 

Let's face it, the 2009 Fusion I4 with 160 hp and EPA rated 28mpg highway does not measure up will with the competition right now. I would say it limits sales big time and at that Fusion sales are still up. Now increase hp to over 170, add in extra gear, and pull another 6 mpg highway with much quieter engine, and you have something special IMO. 2010 Fusion I4 is bigger than Focus, bigger trunk, more room, more features, and better fuel mileage and power for a little more money adds up to hot sales IMO. Again. I don't think Ford will come close to matching production to demand on even three shifts. What am I missing here? Huh?

 

2010 Fusion SE will come standard with new 2.5L I4 and 6 speed trans and sticker price will probably be nominally more than '09 with thrashy I4, less power, and much worse fuel mileage. Those who have driven the new I4 Escape have commened that new I4 is much more refined and gets much better gas mileage to boot. 28mpg out of Escape is proof enough.

 

Ford has big winner in 2010 Fusion. Best in class fuel mileage and best in class price with Sync technology. I can't wait until Ford announces specifics about new Fusion publicly.

[Unknown25]

Fusion barely topped 10k this month, fleet sales included. No need to worry about demand exceeding production.

 

Worst case scenario, base Fusion is going away in 2010, base Focus is finally killed, lineup gets adjusted to make room for the Fiesta.

 

If Ford was smart, they would ditch the base Milan as well, and turn that volume into Hybrid sales.

 

No point in wasting capacity for trims that aren't as profitable.

 

Camry - Net

Accord - New

Altima - New

Malibu - New

Aura - Newer

Optima - New

Sonata - Refreshed/Re-engineered

Passat - Newer

 

the fusion is doing fine for being in it's late model year, against all new competitors. Short of us commissioning JD Powers to conduct a study on fuel economy vs. sales increases vs. vehicle size I think it's safe to conclude that FordBuyer's comments that a new Fusion with fuel economy the same as a Fit or Yaris is going to see a significant sales increase.

Edited August 3, 2008 by Unknown25

[blazerdude20]

The difference is barely 1k between trims, the fact that you accept Ford could get as much as 8k more per car says a lot about the difference between both type of buyers.

 

Better to lose a customer to Kia & Hyundai, than Honda or Toyota. Better to have someone looking to spend ~20k on a car, who will value your product, and be impressed enough to be willing to spend a little more, than wasting a unit/sale, volume-wise, on those "flavor of the month" unloyal customers, who are just looking for a bargain, especially when they're the ones who only buy when there's cash on the hood.

 

That's not investing in your future, that's sacrificing dollars for cents.

 

+1.

 

all the base fusions i see are ad cars selling for 15k. even the government buys 4cyl se auto. its well worth the extra grand to move up from base.

[sullynd]

How is the Fusion 2.5 going to get such better fuel economy than the Mazda6 2.5? Is the one extra gear a miracle gear?

[focus05]

Gear ratios, the extra gear, throttle control, aerodynamics, low-rolling resistance tires, etc.

[FordBuyer]

How is the Fusion 2.5 going to get such better fuel economy than the Mazda6 2.5? Is the one extra gear a miracle gear?

 

Look at new Escape with same drivetrain as 2010 Fusion.....it gets 28mpg which is same EPA rating as present I4 Fusion. The new 240hp V6 Escape gets same EPA mileage as present 221hp V6 Fusion. The Escape is an aerodynamic slug compared to the Fusion which sits much lower and good aerodynamics which will probably be improved further on new model with tweaking. Ford has already stated that new I4 Fusion will get at least 34 mpg. We will have to wait and see, but it looks promising.

[Michael Reynolds]

How is the Fusion 2.5 going to get such better fuel economy than the Mazda6 2.5? Is the one extra gear a miracle gear?

 

Is the 2.5 that Ford uses the exact same engine as the one that Mazda does?

[RichardJensen]

1) I expect LAP will be retooled for CD4 & C2; I don't think Ford is going to retool LAP exclusively for C2.

 

Consider that there is an exclusive CD3 plant (HMO) and a CD3/D3 plant (OAC) and a D3 plant (Chicago), I wouldn't expect Ford to deviate too much from that pattern with C2 & CD4, having a C2 exclusive plant (2 if you include KCAP's Escape/Mariner line) and a C2/CD4 plant.

 

You would thus have:

 

C2: 2 plants

 

C2/CD4 1 plant

 

CD4 1 plant

 

CD4/D3 1 plant

 

D3 1 plant

 

--

 

2) There will be no capacity added for the CD3 Fusion. Any capacity actions will be done concurrent with or after the launch of the CD4 Fusion.

[Roadrunner]

We're all looking at the Fusion's success on the merits of what is under the hood.

 

I'm just concerned that the exterior of the thing needs to be spectacular for those merits to be realized and appreciated. I'm just not entirely seeing it.

 

Remember the Five Hundred? Great car -- amazing package. Reliable as a rock. Failed exterior design language.

Edited August 4, 2008 by Roadrunner

[jobu37]

In the latest fleet numbers for 2007, the Fusion was at 23.3% fleet. Incuded in those numbers are 13% rental fleet sales. Up from 12.4% in 2006. The total number of fleet vehicles is 32,553. 12,250 Commercial, 1,527 Govt. and 18,776 Rental fleet. While these are not quite full year numbers they do provide a guideline as to how much excess production the Hermosillo plant currently has. Ford can first move these sales to retail to meet the hight demand that I agree will result from the refresh. Milan has another 6,120 fleet sales and MKZ has 1,466 that can also be moved to retail sales channels. I think the excess capacity may be enough to meet the demand for the traditional powerplants. However, the hybrid demand could very well warrant another line at another plant. Unless, of course, Ford has agreed to another contract with a supplier that limits them to 25K per year. I suspect this is exaclty what they have done since they recently announced that hybrid sales were going to double in 2009. So that means 25K of hybrid sales will be included in production at Hermosillo. Producing the hybrid model at Hermisolla pretty much assures the plant of being the first Ford plant to come close to the Honda approach to auto manufacturing which is to build to retail demand. In the end, the Fusion, which is already a very profitable car, will become even more profitable. And to Richard's point, it would seem unlikely that they would make the investment in another plant on a model with such a short model run.

[akirby]

34 mpg is most likely the Hybrid - Kuzak wasn't specific about that. Expect the non hybrid to get 32 mpg - enough to beat the Camcords.

 

Mazda's 3.7L is built in Japan and is not identical to Ford's 3.7L.

 

It would be smarter for Ford to reduce incentives, max out Hermosillo, eliminate fleet sales and limit or eliminate low end models for the next 2 years at least, then consider adding another plant if demand continues.

Edited August 4, 2008 by akirby

[jobu37]

34 mpg is most likely the Hybrid - Kuzak wasn't specific about that. Expect the non hybrid to get 32 mpg - enough to beat the Camcords.

 

Mazda's 3.7L is built in Japan and is not identical to Ford's 3.7L.

 

It would be smarter for Ford to reduce incentives, max out Hermosillo, eliminate fleet sales and limit or eliminate low end models for the next 2 years at least, then consider adding another plant if demand continues.

If the hybrid Fusion only gets 34 mpg you can nix all my earlier speculation about needing extra capacity for hybrid production. And at those numbers you can expect to be lucky to sell 25K year. I believe the hybrid Accord had numbers close to that and it was so succesful that Honda pulled the plug on it.

 

However, considering that the Escape Hybrid gets 36 city and 31 hwy it seems reasonable to expect the Fusion to beat this. There was also an article about the Fusion Hybrid getting over 40 mpg city. It was these numbers that led me to believe that the Fusion hybrid was going to be an out of the park homerun.

 

What's the weight difference between an Escape and Fusion? If it is considerably in the favor of the Fusion the 40 mpg would make sense.

[akirby]

However, considering that the Escape Hybrid gets 36 city and 31 hwy it seems reasonable to expect the Fusion to beat this.

 

The 09 Escape hybrid is 34/31, not 36/31.

 

Guess we'll have to wait and see when the official numbers come out. I hope the non hybrid I4 does 22/34 - that would blow away the competition.