Toyota Motor Corporation (ADR) (TM): Can Ford Motor Company (F)’s Fusion Reclaim the Sales Crown?

Ford’s Fusion, Titanium trim. Photo Credit: Ford Motor Company.

Ford Motor Company (NYSE:F)’s Fusion is on pace to do something no other vehicle besides the F-Series has done in nine years: sell more than 300,000 units in one year. Ford Motor Company (NYSE:F)’s flashy sedan also has the best chance to do something a Ford vehicle hasn’t done since the Taurus in 1996: take the sales crown in the mid-size sedan segment. To help the Fusion accomplish this rare feat, Ford Motor Company (NYSE:F) needs to fix one thing — and it just has.

Gaining ground
Sales of the Fusion were up 13.4% through July. That increase made the sedan partly responsible for Toyota Motor Corporation (ADR) (NYSE:TM)’s Camry becoming one of only two vehicles in the top-20 sales ranking to decline in year-over-year sales, down 0.6%. Toyota Motor Corporation (ADR) (NYSE:TM)’s Camry has taken the mid-size sales crown in 15 of the last 16 years, but the Japanese automaker now recognizes its increased competition.

“It is true that rival carmakers have come out with very competitive models in the segment, and that competition in the U.S. mid-size sedan segment is becoming fiercer,” Nobuyori Kodaira, a Toyota Motor Corporation (ADR) (NYSE:TM) executive vice president, according to Bloomberg. “What we need to do is to come out with even more competitive models.”

Graph by author. Information credit: Automotive News DataCenter. 2013* estimated through first 6 months of sales.

As you can see, the Fusion is clearly catching up with the Camry — but recent supply constraints have held the Fusion back.

“Once our additional manufacturing capacity on Fusion comes on line, the battle for sales leadership in the midsize segment will tighten considerably,” said Erich Merkle, Ford U.S. sales analyst, in a company press release.

Consider that the Fusion is selling in fewer than 20 days in key markets such as San Francisco, Los Angeles, and Miami — far faster than the industry average of roughly 60 days, according to Ford Motor Company (NYSE:F).

Ford Motor Company (NYSE:F) has to increase its production capacity before the Fusion can take its shot at topping the Camry and climb atop the sales ranks. And on Aug. 29, Ford announced that it’s hiring 1,400 new jobs and investing $555 million in its Flat Rock Assembly Plant to increase Fusion production. The move is expected to boost production capacity by about 30%, or up to 350,000 units annually.

Money, money!
This increased capacity does more than just enable Ford Motor Company (NYSE:F) to sell more Fusions; it will also increase profits.