Ford Aims to Shake Up Family Car Market


Ford Motor Co. next week hopes to regain sales momentum with a radically restyled version of its family sedan, the Fusion, in an attempt to recapture the leadership of the mid-sized car market.

The new car, to be unveiled at the North American International Auto Show in Detroit next week, will present a clear contrast to two key competitors with more sedate looks: Toyota Motor Corp.’s top-selling Camry and Honda Motor Co.’s aging Accord, according to those who have seen it.

Ford needs a big-selling mid-range car to spur growth after its post-recession momentum in the U.S. lost steam in 2011 to a resurgent General Motors Co. and Chrysler Group LLC. Ford gained just a tenth of a point of market share in the U.S. while GM was up half a point and Chrysler jumped 1.3 points. Worse, its slim gain came at a time when Toyota and Honda suffered inventory shortages.

Ford has had success before with a radical change in designs. In the 1990s, the jelly-bean shaped Ford Taurus was a big hit, selling as many as 409,000 in 1992 before being passed by Toyota’s Camry and Honda’s Accord. Their successes in the U.S. mid-sized car market helped to accelerate Detroit’s market share losses.

Often bashed for its staid designs, Ford has had something of a renaissance with its Focus and Fiesta. The Fusion redesign, due out next year as a 2013 model, will look more like the ultraluxury sports car Aston Martin Vantage than the current boxy version.

“It’s just drop dead gorgeous,” said Earl Hesterberg, chief executive officer of dealership Group 1 Automotive Inc. and a former top Ford sales and marketing executive. “It will be the most visually differentiated car in that segment in a long time. If they’ve got the best-looking car in a segment that is not rich with highly styled offerings, it could be very powerful for Ford,” he said.

For Ford and its Fusion, recapturing the lead will be no easy task. Volkswagen AG’s new Passat is off to a fast start, generating in the final quarter of 2011 double its U.S. sales compared to all of 2010. And it faces a newly redesigned Camry and coming redesigns of the Accord, Nissan Motor Co.’s Altima and GM’s Malibu.

The family sedan accounts for just under 20% of the U.S. market for car sales and it’s often the entry point for shoppers looking at a brand, even if they don’t buy that car. “The opportunity facing the brand is enormous,” said Jim Farley, Ford’s marketing and sales chief.

Ford executives argue they have a car that stands out from the pack, just as the top competitors are weakened. Honda and Toyota lost market share in 2011, something their executives blame on supply interruptions. But the Accord and Camry were slipping even before the March 11 earthquake in Japan, losing share, in particular, to Hyundai Motor Co.’s stylish Sonata.

Toyota held the top spot in the U.S. family sedan market with the Camry last year, followed by the Altima and the Fusion. But the distance between the leaders and the pack has shrunken. As recently as 2005, the Accord and Camry sales together accounted for 800,000 vehicles, more than all of VW and Hyundai sold in the U.S. combined that year. In 2011, their combined sales were 544,000.

Ford won’t project sales of the model, but in October the company announced that it would add Fusion capacity at a plant in Michigan in addition to the existing factory in Mexico, expanding capacity by about 100,000 units if both plants were working at full bore, bringing total output to more than 350,000 vehicles a year.

“The midsize car segment has never been more competitive,” said Michael Robinet, an analyst at IHS Automotive Consulting. “It’s a shot over the bow of the Camry, Altima and Accord.”

The new Fusion looks quite a bit like Evos concept car that Ford showed at the Frankfurt Motor Show in Germany last September. It has a squared-off nose reminiscent of an Aston Martin and a roofline that flows into the rear of the vehicle like late-1960s Mustang fastbacks.

It was designed by Ford’s European styling studio, the same group that made the Focus. Ford is leaning on its Cologne, Germany, designers to style most of its passenger cars, while its U.S. design studio concentrates on SUVs and trucks. In Europe, the new Fusion will be sold as the Mondeo.

Some Ford executives say they expect it take sales from Japanese companies and from luxury car makers such as Audi and BMW because of its styling.

In addition to design, Ford will offer for the first time a lane-departure warning system on the Fusion, a safety feature now the province of premium vehicles. The company hasn’t released the car’s pricing or expected fuel economy.

Honda isn’t ready to shrink away, however. Tetsuo Iwamura, president of American Honda, said the Accord coupe that will be shown in Detroit next week will demonstrate the company’s intention to regain its market status. Honda’s Accord dipped to a just 7.7% share of the mid-sized market last year, down from 10.1% in 2010.

Honda and Toyota “cannot afford a misstep,” Mr. Robinet said. “If their customers move to another manufacturer, they will have trouble getting them back.”

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