It’s official: The Ford (F) Focus was the best-selling car in the world in 2012, according to R.L. Polk & Co.
While the title comes with all sorts of caveats, the rise of the Focus nameplate says all kinds of things about the U.S. and Asian automotive industries, the importance of global manufacturing and how Thailand became the new Spain.
Ford Motor Co. (F:US), leading U.S. automakers in building their best cars in decades, registered 1.02 million Focus cars in 2012, topping 872,774 for Toyota Motor Corp. (7203)’s Corolla, according to Polk data that Ford released today. Ford’s F-Series pickup line was the No. 3 nameplate, its Fiesta subcompact was No. 6, and General Motors Co. (GM)’s Chevrolet Cruze was No. 8, ahead of Honda Motor Co.’s Civic.
The Focus, Fiesta and Cruze are among several models from U.S. automakers that are succeeding against Japan’s Toyota and Honda, which used to dominate car segments. Ford has been revived by Chief Executive Officer Alan Mulally, who has overhauled its lineup with more fuel-efficient models to round out its strength in big pickups and sport-utility vehicles and pushed a global product-development plan called One Ford.
“Since Alan has been with us, we’ve put a tremendous amount of attention toward balancing our product portfolio,” Erich Merkle, Ford’s U.S. sales analyst, said by telephone. “We had to better represent what the majority of the world is looking for, and they’re looking for smaller passenger cars.”
Polk’s estimates may be rough. Toyota said global Corolla sales last year reached 1.16 million vehicles, or 33 percent more than the researcher’s figure. The difference may be that Toyota includes sales of models with names such as Corolla Axio and Corolla Altis.
The numbers themselves don’t necessarily mean anything if robust profits don’t follow. The top-selling car in the U.S. remains the Toyota (7203) Camry, as it has been for 11 years, and Toyota regained the global sales crown from GM last year.
All that said, the announcement is good reason for Ford -- and, more broadly, the resurgent U.S. auto industry -- to cheer.
Ford probably hasn’t been able to claim ownership of the global best-selling model since the days of founder Henry Ford’s Model T or its successor, the Model A, said John Wolkonowicz, an independent auto analyst based in Boston. Volkswagen AG (VOW) had the most global reach with its Beetle starting in the mid-1950s, and Volkswagen (VOW)’s Golf and Toyota’s Corolla have traded worldwide sales leadership by model more recently.
“It’s a significant achievement for Ford,” he said in a telephone interview.
Ford gained 0.2 percent to $12.80 at the close in New York. The shares have fallen 1.2 percent this year compared with a 10 percent jump for the Standard & Poor’s 500 Index.
Global Focus registrations rose 16 percent last year from 879,914 in 2011, when Ford says it was also the world’s best- selling car, according to Merkle. Polk is unable to provide data on global sales by nameplate beyond what Ford has released, said Michelle Culver, a Polk spokeswoman who works for Lambert, Edwards & Associates.
The global bet by Mulally, 67, has paid off as burgeoning wealth in countries such as India, Indonesia, China and Thailand bring their auto markets more in line with the developed world.
There were only 32 vehicles in operation in India for every 1,000 people of driving age in 2011, according to Ford. Indonesia had just 49, China 83 and Thailand 200, compared with 975 in the U.S. and 654 in Germany. Expansion in those emerging markets is expected by Ford to come from first-time buyers seeking affordable small cars.
“If you want to be successful in Southeast Asia and in China, you’ve got to have great subcompact and compact car offerings to compete,” Merkle said.
Focus registrations surged 51 percent last year in China, the world’s largest auto market, according to Southfield, Michigan-based Polk. Ford has started construction on a third assembly plant in Chongqing after adding its second factory in the city in southwestern China in February.
The second Chongqing plant boosted Ford’s car capacity in China by one-third, to 600,000 units, and helped the company to more than double Focus registrations in the country in each of the last three months of 2012, Polk data show. Ford also builds the Focus in Wayne, Michigan, and in factories in Germany, Russia and Thailand, according to its website.
“The demand picture in the U.S. and China seems to be favoring where Ford is strong, which is increasingly in small cars,” said Kevin Tynan, an analyst for Bloomberg Industries research in Skillman, New Jersey. “You’ve got an emerging market in China and a market that’s recreating itself in the U.S. that are favoring small cars, fuel efficiency and value.”
Ford has earned $35.2 billion the past four years after losing $30.1 billion from 2006 through 2008. The Dearborn, Michigan-based company avoided the government rescues and bankruptcies that that befell the predecessors of GM and Chrysler Group LLC in 2009 by borrowing $23.4 billion three years earlier.
GM and Chrysler failed in part because of a lack of competitiveness in car segments. President Barack Obama, whose administration oversaw the government-backed restructurings, asked why GM or Chrysler couldn’t produce a car as good as a Corolla, Steve Rattner, former head of Obama’s automotive task force, wrote in his 2010 book, “Overhaul.”
That has changed, thanks to cars like the Cruze, introduced by Detroit-based GM in 2010. The automaker is no longer a “big Midwest truck company,” Mark Reuss, president of GM’s North American operations, told reporters last month at the New York auto show.
“The domestics concentrated on light trucks in the ’90s and really let their cars slip,” Tom Libby, Polk’s lead analyst for North America, said in a telephone interview. GM and Ford “have the capability of doing anything that the Asian companies do. They needed to focus on their core business, and you could make the case they were not doing that in the late ’90s and early 2000s.”
GM’s Cruze had 661,325 registrations last year, ahead of 651,159 for Tokyo-based Honda (7267)’s Civic, according to Polk. The researcher’s global reporting typically lags by three to four months because it tracks more than 80 markets worldwide.
Chrysler, too, has made strides with small cars that complement the Auburn Hills, Michigan-based company’s forte in Jeep SUVs and Ram trucks. The Dodge Dart compact, developed along with majority owner Fiat SpA (F), has set monthly U.S. sales records since December. Chrysler and Turin, Italy-based Fiat also are selling the car in China under the name Viaggio after introducing it in the U.S. in June last year.
Japan’s automakers won’t make it easy for the U.S. companies to maintain their momentum in small cars. Toyota City, Japan-based Toyota is introducing a revamped version of its Corolla later this year.
Honda released a modified version of its Civic in November that has pacified critics, including Consumer Reports, which dealt the company a blow by withholding its recommendation for the car more than a year earlier.
In addition to the promise of new models, Toyota and Honda could benefit from the weaker yen and a rebound in China, where anti-Japan sentiment related to a territorial dispute has deterred consumers from buying their cars along with Nissan Motor Co. (7201)’s.
Demand for Japanese-branded vehicles in China will recover within three months, Andy Palmer, executive vice president of Yokohama, Japan-based Nissan, told Bloomberg Television last week.
In the U.S., cars like Toyota’s Camry and Corolla and Honda’s Civic and Accord are still leaders and maintain a loyal ownership base that will test U.S. automakers’ ability to continue closing the gap.
“The Asians have a strength in smaller vehicles that they’ve had for many, many years,” Polk’s Libby said. “GM and Ford have to be competitive in those segments to be competitive globally. It’s going to require a long-term effort.”
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