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Ford Fusion Making Conquests in Midsize Segment


October 2006
 Filed under: FORD Car News | FORD Headlines
DEARBORN, Oct. 23, 2006 (By Daniel Wallace, FCN) -- If you'd visited Klaben Ford in Kent, Ohio, a year ago, you might have noticed that the trade-in vehicles on the used car lot were mostly Fords. Today, the lot is more diverse, with Nissan Altimas, Honda Civics, and Pontiac Grand Ams.
The reason for the shift? The Ford Fusion. Forty percent of all Fusion sales have been conquest customers -- those who previously drove other brands.

"It's been really refreshing to have a vehicle like the Fusion in our showroom," said Rich Klaben, owner of Klaben Ford. "We've finally got a car that's selling because of the vehicle and not because of the price."

Since its introduction a year ago, sales have increased on average 15 percent per month with more than 112,000 vehicles sold to date.

"Fusion has exceeded our expectations and has provided Ford with a new entrant into the growing mid-size car segment, a segment we have pulled away from in the past," said Fusion launch manager Kate Pearce.

The segment is the largest and most competitive in the industry, with players like the Chevy Malibu, Honda Accord, Hyundai Sonata, Nissan Altima and Toyota Camry. And though Fusion doesn't have the same volume as its predecessor, the Taurus, Jesse Toprak, executive director of industry analysis for Edmunds.com, believes the Ford vehicle is an exact fit for the market.

"I think the Fusion is a well-done vehicle. It is difficult to completely standout in this segment because you have to appeal to the most common denominator. Therefore, you can't be too edgy, which Fusion isn't. Plus you have to offer good functionality and responsible pricing, which the Fusion delivers well."

An automaker generally doesn't see the success of a vehicle until six months after its introduction. Toprak says after the hype dies down true demand for the vehicle can be determined by comparing incentives and vehicle turnover rates.

The Fusion, with an average shelf-life of 30 days, passes Toprak's test with flying colors. The average shelf life in the segment is nearly twice that long. Incentives have hovered around $1,000, another good sign that shows Ford isn't spending excessively to move Fusions off dealer lots. In September, the sales discount on Fusion's MSRP was about 9 percent, six points below the industry average.

"I don't think an incentive in the world will make a difference on a car like the Fusion as long as it's priced competitively," said Klaben, who sells two other automotive brands. "Everyone is looking for Ford to fail, but the Fusion has been a real success story."

Despite better-than-expected Fusion sales, Toprak says Ford is fighting a bigger battle, and that's the battle of perception.

"The brand name is so much a factor in how people shop that it's almost an uphill battle, not only for Fusion but for all domestic vehicles," he said.

Kevin Collins, owner of Collins Ford in Louisville, Ky., agrees that if the brand could improve its image and build more stylish products like Fusion vehicles would move much faster. Ford products would climb higher on consumers' lists of cars to consider.

"A recent Fusion buyer told me she had leased three previous Honda Accords in a row. When I asked her why she went for the Fusion, she said, 'I loved my Hondas, but the styling of the Fusion caught my eye. Then I did my research and I discovered that the Fusion is the better value.' " Collins said he's using her testimonials in handouts at the dealership because it's a great form of advertising.

David Cole, chairman, Center for Automotive Research, feels there aren't too many poorly executed products these days -- it's image and preconceived ideas that make the difference.

"Most of the products on the market fair about the same in terms of quality, but there's a perceptual lag between consumers and what they think of American vehicles," Cole said. "It's one of those situations where you have to earn your way back into perception, which simply takes time, along with successful products."

Klaben says he has gotten most of his Fusion customers as a result of favorable media coverage and advertising.

"I have a customer right now, who a year ago wouldn't consider a Ford car. The customer knew we had good trucks and SUVs, but already had decided that if they were going to get a car, it would be from Toyota or Honda," Klaben said

Klaben says he thinks positive media and advertising buzz is improvingimpacting public opinion, and the customer he described is now considering a Fusion once the Camry lease ends.

"In the Way Forward, they were saying 'if we can just get people in the cars.' Well, we can't think like that anymore; they've got to want to get in the car," he said.

For Bradley Nuffer of Peachtree City, Ga., all it took was a quarter-mile test drive to seal the deal. Nuffer traded in his Jeep Grand Cherokee for a Ford Fusion.

"I never had in my mind that I would buy a Ford, but at the same time I never had in mind that I wouldn't," said Nuffer, who considered getting a Toyota Yaris. "Now I'll tell anyone, Fusion is the way to go."

Fusion has been refreshed for the '07 model year with more standard features that include side impact airbags and an audio input jack for an iPod. The SE and SEL models also have a folding front passenger seat, fog lamps and aluminum wheels as standard features. The Fusion also offers new options like DVD navigation, Sirius satellite radio and an I-4 appearance package.

A key competitive feature for Fusion is its all-wheel-drive option, not available on the Accord or Camry. For about $24,000, Fusion customers can purchase a V6 AWD, which is virtually the same price as a front-wheel drive Accord or Camry.

"I think Fusion has good balance of functionality, quality and style that I suspect will make a strong product through its life cycle," said Cole.

Source: Ford Motor Company

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