Ford has inventory shortages of the Fusion and the Escape, top sellers in the midsize sedan and utility segments, and plans to resolve them with production increases this fall. Until then, the automaker is losing an uncounted number of sales because it doesn't have enough product.
In July, when U.S. light-vehicle sales rose 14%, Fusion sales fell 12% to 20,522 units and sales of Escape, the best-selling utility vehicle this year, rose just 3.6% to 22,343. During the month, Toyota -- with light-vehicle sales in July of 193,394 -- beat out Ford light-vehicle sales of 193,080.
Ford's Fusion supply is down to 30 days, about half the industry average, while the Escape supply is around 40 days. In the fall, Ford will boost Fusion production after adding 1,400 workers at its Flat Rock, Mich., plant. As for Escape, "we're making all we can in Louisville right now," said Ford analyst Erich Merkle. Ford will also increase production of the Explorer, another hot vehicle, at its Chicago plant.The time it takes to sell a Fusion, once the car gets to the dealer, is extremely brief for a car that was introduced about a year ago. "In some key coastal markets like L.A., San Francisco and Miami, the days to turn is around two weeks, in an industry where it usually takes about two months to move a vehicle," Merkle said. Coastal markets are important because, historically, the Detroit Three do well in the middle of the country and foreign manufacturers dominate on both coasts. Call it "a good problem to have" if you like, but not being able to produce enough product to satisfy demand is rarely as good as being able to produce enough product to satisfy demand. Edmunds.com analyst Jessica Caldwell said sales growth for popular vehicles like Fusion and Escape depends on "conquests," taking buyers from other brands. "It will hurt (Ford) if they don't have inventory out there (because) new buyers will stick to what they're used to," Caldwell said on a conference call with reporters. "It could be detrimental." Caldwell noted that Ford's 11% sales gain in July was less than the industry average gain of 14%, one indication of the extent of the sales loss.