Seeking Alpha
Growth, value, special situations, momentum
Profile| Send Message|
( followers)  

Even with gas prices dropping slightly recently, they are still well above what cosumers were paying last year. People seem to be ever mindful of what they are paying for gas, and with the national average sitting at about $1 above last year, fuel efficiency has become a sort of mantra.

Ford (NYSE:F) is not ignoring the issue, and recently changed the landing page of their website to highlight three vehicles that boast over 40 miles per gallon. Changes in marketing like this do not happen by accident. Compact cars, viewed as more fuel efficient, are selling faster and faster with each passing month and Ford, with their Focus model in particular, has seen a distinct drop in the number of days to sell. In March, according to Edmunds, the Focus was taking 93 days to sell. The data for April shows a massive 42% improvement and now the Focus sells in just 54 days.

It seems that Ford is getting a closer look from consumers these days. The supply concerns that have impacted Japanese makers has indeed translated into other brands being given a chance. Ford is capitalizing on their new-found brand awareness by highlighting cars that once were seen as low end. One key element driving consumers to consider Ford is their connectivity features with Sync and MyFordTouch. Combine these desirable features with great fuel economy and you have a recipe for success.

The three cars Ford has that get over 40 MPG are the Focus SE with SFE (Superior Fuel Economy) starting at about $18,000, the Fusion starting at just under $20,000, and the Fiesta starting at about $15,000. By having a nice selection in the sub $20,000 price point, Ford can woo buyers looking for value and fuel efficiency.

Traditionally it has been Ford trucks that paved the way for quarterly success. The Ford F-150 has been a consumer staple for decades. These days even the trucks and SUV's focus on better fuel economy. While trucks will still carry the load, it is more fuel efficient cars, such as the Focus and Fusion, that could be the icing on the cake.

The auto sector has seen a rebound in 2011, and as yet the market has yet to show any real appreciation for it. There are several factors that I feel make Ford a Buy at about $15 per share, and their new focus on fuel efficient selling is yet another reason I am liking Ford at these levels.

It is anticipated that May auto sales may see a bit of a lull, but this could present a fantastic buying opportunity. Most every industry analyst is still expecting U.S. sales for the auto sector to be at 13 million or more, a stark improvement from the less than 12 million we saw last year.

May auto sales releases are about a week away. Watch Ford closely as these numbers are released.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: Ford's Focus on Efficiency Could Boost Sales