U.S. car buyers have been flocking to the Ford Motor Co.’s (NYSE:F) Fusion sedan, and this has been pushing down the supply of the company’s second-best-selling vehicle after the F-Series pickup truck.
Wards Auto says North America’s second-largest automaker is down to a 39-day supply of the midsize sedan, considerably lower than the 60-day supply generally considered to be healthy: If the supply is too low, sales can be lost as some dealers would not have vehicles to sell, and if it is too high, the company loses money on the costs of maintaining unsold inventory and offering incentives to spur sales. In the current case, demand is so high that Ford has had trouble bringing up its inventory.
Right now, the Ford Fusion supply is in an area where production will have to be kept high. Ford announced, along with other major automakers, that to meet demand it would be cutting the length of time its plants sit idle this summer. The Fusion is made at the company’s assembly facility in Hermosillo, Sonora, Mexico, but production is being added at its plant in Flat Rock, Mich.
“Inventory is going to be real tight during the summer months,” Erich Merkle, Ford’s U.S. sales analyst, told the Detroit News.
The U.S. auto market is seeing robust demand for trucks and crossover SUVs and midsize sedans. Ford’s latest Fusion has received generally positive reviews from the auto press for its power, fuel economy and bold body style. Sales of the Fusion are up 22 percent this year. Last month, Ford reported, it sold 29,553 Fusions, up 10 percent year over year.
Toyota’s Camry is the No. 1 seller in this segment, with more than 400,000 units sold in the U.S. last year. The Honda Accord and the Nissan Altima are the second- and third-best-sellers, respectively, with more than 300,000 units sold in 2012. Ford sold 241,000 Fusion units last year.