Ford's Biggest U.S. Problem Is a Good One: Too Few Fusions
DETROIT ( TheStreet) -- Of course, investors are put off by Ford's
In April, Ford's biggest problem, in terms of domestic sales, was that it could not make enough Fusions. Rather, its Fusion inventory was at a bit less than a 40-day supply, compared to its overall inventory supply level of 66 days. At the Hermosillo plant where Fusion is made, "we're doing everything we can to get out as many as we can," said Ford sales analyst Eric Merkle, in an interview. "We would like more inventory, particularly as we get into the summer months."
Ford's solution is to expand Fusion production to its Flat Rock, Mich., plant in the fall.
"By the time that production capacity comes on line it will be too late to make much of a dent in 2013, although it will certainly help in 2014," said Kelley Blue Book analyst Alec Gutierrez. Fusion had its best April ever, selling 26,722 units on a 24% sales increase, but "they could have had an even stronger showing had they had additional production capacity," Gutierrez said.
That basically concludes the list of Ford's problems on the domestic sales front last month, and obviously too few Fusions is in some ways a good problem to have. On the positive side, Ford had strong showings in the top three segments. Pickup trucks, which accounted for 11.5% of industry sales, were up a point from the same month a year earlier; sales of the most popular U.S. vehicle, the F-150 pickup truck, rose 24% to 59,030. In the small utilities segment, which accounts for about 15% of industry sales, up about a point from a year earlier, Escape sales rose 52% to 25,826.
Ford announced that starting in the third quarter it will add more than 2,000 jobs at its Kansas City assembly plant to support high demand for the F-150 and for the new Transit family of commercial vehicles. F-150 production will employ about 900 of the new employees, with the rest working on the Transit starting in the fourth quarter. The plant currently employs 2,450 hourly workers.
"Customer demand for today's F-150 is strong and continues growing, the truck segment is growing three times faster than the overall industry, the housing market is strengthening, and we are seeing growth in the U.S. economy," said Joe Hinrichs, Ford president of the Americas, in a prepared statement. "We are going to expand operations in Kansas City to ensure we have enough trucks to meet customer demand."
Meanwhile, the mid-sized car segment in April shrank to about 16% of industry sales, down two points from its level in the same month a year earlier. While Fusion sales rose 24%, Honda