Ford to Pit Next Fusion Against Chevy’s Volt and Nissan’s Leaf
by Jeannette Di Louie, Investment U Research
Wednesday, January 11, 2011
Ford Motor Company (NYSE: F) thinks it can do something its competitors just haven’t been able to yet, try as they desperately have. It’s taking a drive into the world of environmentally conscious consumers with its newest model of the Ford Fusion.
That might not sound all that scary a decision for a business to make, since green energy certainly seems to be all the rage these days. But that doesn’t mean it always makes a great investment, as General Motors (NYSE: GM) found out the hard way last year with its Chevrolet Volt.
Everyone ranted and raved about the electric vehicle (EV) when it first hit the news. Back then, before anybody could prove otherwise, Chevrolet claimed its newest creation was a new breed of transportation altogether…
It wasn’t a hybrid or a plug-in hybrid, the company said. It was an “extended-range electric vehicle,” which sounds so much cooler.
With that kind of hype surrounding it, the Volt seemed to have it all, from its eco-friendly engine to its sleek and sassy chassy. People could not only save the planet from the ravages of carbon emissions, but they could do it in style.
Or so the automotive media claimed. Cross their hearts and hope to die.
A Trend for Electric Cars?
Unfortunately for Chevrolet, the reality was far less spectacular than the dream, as it oftentimes is.
Well before it had to start recalling the vehicles for the fire hazards they could present after side-impact collisions, the Volt wasn’t even coming close to meeting its sales goal of 10,000 units for 2011. And while it did get a nice bump in December, it still finished the year out down by 2,329.
An embarrassing failure by any standards, recession or not.
Admittedly, General Motors hasn’t been the healthiest company around for a while, as evidenced by their repeated requests for federal finances to keep their crumbling company alive in 2008 into 2009. Even so, the Volt’s big competition last year, Nissan’s (OTC: NSANY.PK) Leaf, fell short as well, though by merely 1,280 of its 10,000-unit goal.
None of that negative data seems to disturb Ford, however. Chief Executive Officer Alan Mulally and his team of automotive experts are busy even now working on their newest version of the ever-popular Ford Fusion for 2013.
It’s going to be an EV… and they’re all but daring consumers not to love it.
Ford Fusion Runs on Past Successes
Ford might seem late to the game when it comes to electric vehicles, considering all of the hype surrounding them for the past few years. But like the tortoise racing the hare, that might be their saving grace.
More often than not, when it comes to big purchases, consumers need some time to wrap their head around the idea of trying out something new. They need to be wooed into the purchase gently, convinced that their money is well spent on such a giant leap of faith.
That’s oftentimes partially because bigger purchases such as cars are usually more necessity than luxury, which means that they need to be practical. And let’s face it: Right now electric cars are not all that practical. For one thing, there’s an appalling lack of plug-in stations on the road these days and, without those pit stops, EVs have a disturbingly limited battery life.
But the technology seems to keep improving as time goes on, as technology often does. And so, by holding out until 2013 while its competitors went all in last year, Ford might have saved itself a lot of grief.
It can fine-tune its craft while simultaneously learning from Chevrolet and Nissan’s mistakes. So its finished product will probably be stronger, more practical and more attractive to consumers. It’s a technique that has worked wonders in the technology world over the past few years for Apple (Nasdaq: AAPL).
More than likely, Ford is going to end up showing its competitors how real business is done.
Good Investing,
Jeannette Di Louie
Article by Investment U
