Ford Motor Co. is canceling the redesign program for its Fusion and is reevaluating the future of the midsize sedan in a move signaling the change new CEO Jim Hackett is bringing to the Blue Oval.
In a November letter sent to suppliers for the new Fusion program obtained by The Detroit News, Ford officials said the company is canceling the previously planned North American redesign program — named CD542N — for the 2020 Fusion. The decision does not mean Ford is axing the Fusion nameplate, but it at least temporarily kills a scheduled redesign of Ford’s best-selling U.S. sedan.
Whatever Ford decides could illustrate an ongoing shift in the global auto industry, as well as the financial choices the Dearborn-based automaker must make amid growing demand for finite resources within the company.
A source with knowledge of Ford’s plans said the Fusion and Mondeo, its sister vehicle sold outside the U.S., will be a part of Ford’s portfolio for at least three to four years. Canceling the redesign program suggests Ford’s top brass could be rethinking what a future Fusion might look like rather than eliminating the nameplate altogether.
It’s not unusual for automakers to cancel or change vehicle redesign plans. Such moves typically mean automakers decided they didn’t have the right product or product design to meet demand, according to a second source familiar with Ford’s plans. The sources wished to remain anonymous because they were not authorized to speak publicly about the future of the Fusion.
Ford spokesman Mike Levine declined to comment on the supplier letter, marked strictly confidential, or to discuss specific plans for the Fusion. He said in a statement that “Fusion remains an important part of the Ford lineup for years to come with even more new fresh features on the way. We will have more news to share in the future.”
Hackett said in December that customers prefer a “bigger silhouette,” but bigger vehicles had been stymied by poor fuel efficiency in the past.
“The industry at large has had this shift,” he said. “We’re starting to crack that code. If you can get rid of the difference there because of fuel, you start to relieve the pressure of what kind of portfolio you have to have.”
Hackett’s comments indicate the Fusion could be bigger, or at least look a lot different, if the company decides to redesign it. That brings into question the future of the larger Ford Taurus sedan, which The News reported last summer might be discontinued by the end of 2018. Ford spokespeople have repeatedly declined to comment on the future of the Taurus.
A decision by Ford to cut midsize sedans would follow moves announced in 2016 by Fiat Chrysler Automobiles NV. The Auburn Hills automaker confirmed plans to eliminate the Dodge Dart and Chrysler 200, effectively eliminating its car production in the U.S.
Ultimately, Hackett and his team need to figure out a way to make more money on the Fusion nameplate if they want to keep it around for more than a few years, experts said.
Sedans and small cars are traditionally low-margin vehicles for most automakers compared to SUVs and pickups. A larger Fusion would net a bigger sticker price. It would also give Ford a chance to add more utility to the Fusion nameplate.
Meanwhile, pulling plans for a sedan redesign isn’t a surprise to industry insiders.
“It does make sense,” Karl Brauer, industry analyst and executive publisher of Autotrader and Kelley Blue Book, said. “A lot of vehicles on the market right now that are not SUVs are kind of caught in this death spiral. They are on an aging platform and they’re in a segment that’s not showing any growth.
“Anyone at any high-level point of decision-making is going to ask why they’re spending this money.”
For now, the Fusion’s future is in limbo.
Sales have slowed for the midsize sedan over the last few years. Ford saw Fusion sales drop 22 percent through November following an 11 percent decline for the year in 2016. But the vehicle was still Ford’s best-selling car in the U.S. last year, and some say it won’t make sense for Ford to exit the sedan market completely.
“Maybe they’ll bring a product that is still competitive,” said Rebecca Lindland, automotive analyst for Kelley Blue Book. Canceling program plans, she said, “doesn’t mean that they’re never going to be in that market again.”
The company plans to move forward in China with plans for the Fusion it has canceled for North America, according to the supplier letter obtained by the News. The stop-order for the North American program only applies to those vehicles that would have been made at Ford’s Hermosillo Stamping and Assembly plant in Mexico and at Ford Valencia Body and Assembly in Spain.
Company officials have said Ford does not plan to export the next-generation Fusion or Mondeo from China to North America or Europe. The company in 2017 announced it plans to make the next-generation Focus in China, and export those vehicles from China to the U.S.