Inventory Benefits Ford Focus, Fiesta in December, But Hurts Fusion and Escape

The Ford Fiesta and Focus small cars were the bright spots for the auto maker in December, while the Fusion and Escape remained in the shadow of recalls and limited inventory.

Deliveries of B-segment Fiesta and C-segment Focus jumped a whopping 58.6% and 64.3%, respectively, in the month compared with year-ago on a daily rate basis. There were 26 selling days in December and 27 in like-2011.

Ken Czubay, Ford vice president-U.S. marketing, sales and service, says sales of the two cars picked up as 2012 came to a close thanks to a healthy supply.

“We had the best December ever for Fiesta and Focus,” he says in a conference call with analysts and reporters. “We needed to get the right inventory levels, and when we did that consumers came in.”

Czubay says sales of Ford’s small cars jumped 29% in 2012 to 316,006 units, while the auto maker’s overall car sales rose just 5% for the year to 760,646.

The 2012 tally represents Ford’s best small-car results since 2001, he says, noting Focus now is the world’s best-selling nameplate, while the Fiesta is the top-selling global subcompact car, according to Polk data.

While inventory levels benefited the Fiesta and Focus, they were the primary reason the new Fusion midsize sedan and Escape cross/utility vehicle saw deliveries fall 7.3% and 18.2%, respectively, compared with like-2011.

Both vehicles were plagued last year by recalls of the 1.6L direct-injected turbocharged EcoBoost 4-cyl. engine, due to an issue with the cooling system that could lead to fires.

Ford announced a fix for the problem late last month that involved reprogramming the vehicles’ onboard computer. Consumers who already own a Fusion or Escape with the 1.6L mill now are receiving the fix, while thousands of other units remain in limbo awaiting the remedy.

Czubay expects supply of the two vehicles to return to normal by the end of this month. “In the first half of (December), sales were adversely affected by the recall. We worked with our dealers and provided the fix…and dealers rapidly got into that.

“The 1.6L was a big part of inventory, so we’re working to get those (fixes) completed,” he adds. “We did that before Christmas, and we saw the sales pace pick up after, and January and February will be big months for us.”

Despite the drag on sales caused by the recall, the Escape saw its best sales year ever in 2012, with 261,008 units, up 3% from year-ago.

Ford had other issues to deal with concerning the ’13 C-Max hybrid, with reports surfacing the new vehicle does not achieve its advertised 47 mpg (5.0 L/100 km) city/highway fuel economy in real-world driving.

Czubay declines to discuss whether the reports have impacted C-Max sales, noting only that the hybrid was off to a fast start in its first four months in the U.S. market.

However, the C-Max’s 4,310 December deliveries were 538 units short of its November tally, according to WardsAuto data. It also trailed significantly behind its main competitor, the Toyota Prius, with 15,528 sales last month.

Ford’s luxury arm, newly renamed Lincoln Motor, saw sales fall 8.7% in 2012 compared with prior-year to 82,150 units, significantly behind other U.S. luxury brands.

The auto maker is hoping the all-new ’13 Lincoln MKZ midsize sedan will be the first step toward reinvigorating the brand. MKZ deliveries dropped 30.4% in December to just 1,630.

Czubay says the decline was due to the model-year changeover and that initial orders for the new sedan have been surprisingly strong.

“The new MKZ is arriving now, and we will have normal stock by the end of the quarter,” he says, noting the auto maker is receiving a large number of orders for high trim levels.

“The rich mix is more premium than we expected for MKZ,” he says. “It’s a very encouraging response.”

Ford’s overall December sales rose 5.5% to 209,166 units and were up 4.5% for 2012 to 2,205,547.

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