By reinventing one of its bestsellers, Ford takes a chance that could pay off big.
A version of this article originally appeared on our US site, Fool.com.
From the perspective of last week, there was absolutely nothing wrong with the 2012 version of Ford's (NYSE: F.US) popular Fusion sedan (and its twin over here, the Mondeo). The mid-sized mainstay had seen its sales grow solidly over the past few years -- largely at the expense of the longtime segment mainstays, the Toyota (NYSE: TM.US) Camry and Honda (NYSE: HMC.US) Accord.
In fact, despite being a few years old, the Fusion had its best sales year ever in 2011, ranking third in US car sales behind the Camry and Nissan's Altima.
But that was last week.
On Monday, Ford took the wraps off its new Fusion -- and, as was widely rumoured, it's visually stunning, stylistically reminiscent of sleek ultra-luxury Aston Martin coupes. But it's not just a pretty face: Ford's new Fusion comes with a big surprise -- one that might turn out to be a game-changer.
A welcome failure to play it safe
Automakers don't typically reinvent their bestselling vehicles from generation to generation. Look at the last few Camrys and you'll see a series of minor styling tweaks and incremental improvements over time -- but the current car isn't that different from the one Toyota was selling a decade ago.
The new Fusion, though, expands on the best features of the current model while breaking with it in several ways. The car's look is striking and dramatic, its lines a departure from recent Ford practice that other models are expected to follow in coming years -- and one that will be seen around the world, as this car, like the Fiesta and Focus, will be a global model. The hybrid version is expected to get 47mpg -- a solid improvement on the current Fusion Hybrid's 41mpg, and high enough to beat the latest hybrid entries from Toyota, Hyundai and Kia.
And, in a surprise, there's a full-blown plug-in hybrid version, dubbed the Fusion Energi, set to debut later this year. Ford says that it expects the Fusion Energi's "miles per gallon equivalent," an EPA standard rating used for cars that can run entirely on electricity, to exceed those of General Motors' (NYSE: GM.US) Chevy Volt and the plug-in version of the Toyota Prius.
Ford has so far been coy about details like the Fusion Energi's pricing and range, not surprising for a model that won't hit dealers for almost a year, but an aggressively priced plug-in entry in this class could end up being quite popular.
But while we won't know for sure until on-road reviews (and initial sales numbers) start to roll in, I think the new Fusion is likely to be quite popular no matter what.
A bold step forward in a conservative segment
With the new Fusion, Ford looks set to gain more sales ground on the Camry and Accord, both of which suddenly look a little stale in comparison. While the Accord is, in fact, somewhat stale -- Honda, which is scrambling to perk up its product line, has hinted that a new version will arrive late this year -- the latest edition of Toyota's Camry is only a few months old.
But that doesn't mean that gains will be easy for Ford to find. Despite its incremental, evolutionary design, the new Camry is selling quite well so far -- and strong entries in the segment from Hyundai and Kia, a renewed effort from Volkswagen, and GM's refreshed Chevy Malibu will add to the competitive pressures on the Fusion.
But as last year's two new Fords -- the Explorer and Focus -- have shown, the Blue Oval's recent products can compete with just about anyone on quality, value and fuel efficiency. Add in class-leading "infotainment" features and bold styling, and Ford may have another hit product on its hands.
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> John owns shares of Ford and General Motors.