Ford focusNot long ago, each time gas prices shot up and car buyers turned their attention to more fuel-efficient models, Ford (F) and the other Detroit automakers would get hammered.

Their strengths were in SUVs, big cars, and pickups -- in other words, gas-hogs. Buyers wanting good mpg numbers tended to look to the imports -- enough to make Toyota's (TM) Corolla and Honda's (HMC) Civic perennial best-sellers.

Meanwhile, the Detroit crew got by with small cars that weren't very good (or profitable). Although good enough to be sold cheap to rental-car companies, they didn't sell well to consumers -- and when they did, it was mostly because they were priced right.

Oh, how times have changed. And they've changed in a big way.

A Focus on Great Compact Cars

Sales figures back up the fact that drivers are shifting to smaller cars and SUVs. But this time, those sales figures don't come with horror stories about losses and layoffs in Detroit.

Instead, we're hearing stories like the one Ford's PR folks were proud to tell on Wednesday: Ford's sales in January were paced by a whopping 60% year-over-year gain for the automaker's compact Focus.

Now, to be fair, the current Focus was introduced last spring -- that comparison is with sales for the old car. And while the old car wasn't bad, exactly, the new one is superb. Engineered by Ford's small-car experts in Germany, and lavished with development resources and advanced technology, the latest Focus is a huge leap forward.

I can attest to this personally, as my wife and I bought one a few months back. It's a great car, quiet and tight, with a surprisingly luxurious interior. And it gets more than 30 miles to the gallon, week in and week out.

It's definitely not a typical Detroit compact of old – in fact, we liked it quite a bit better than the current contenders from the import brands. And given how the Focus's sales figures have shown, we aren't the only buyers who have noticed.

But It's Not Just the Focus (and It's Not Just Ford)

Ford's smallest SUV, the Escape, is also enjoying record sales -- up nearly 24% over (strong) year-ago totals, its best January ever. What's interesting is that unlike the new Focus, the Escape is an older model, set to be replaced in just a few months. But lots of buyers are still choosing it over Toyota's RAV4 and Honda's CR-V.

Ford isn't the only company that's onto something with its recent designs. General Motors (GM) is having success with its own compact, the Chevy Cruze. Introduced just over a year ago, the Cruze has found fans all over the world. For a while last year, it was the best-selling compact in the U.S.

Of course, that was while Toyota and Honda were having trouble producing their entries, as they struggled with parts shortages in the wake of the Japanese earthquake and tsunami last March. But Toyota has largely recovered, with sales up 7% in January -- and the Cruze still managed to post a sales gain of more than 10% on the month, while Corolla sales were actually down.

Detroit Is Back, and Its Small Cars Are Better Than Ever

Toyota's not going anywhere, of course. In most every corner of the market, it remains Detroit's fiercest competitor. Despite its troubles in recent years, Toyota still has a large and loyal following. But Ford has nearly caught up. With its wall-to-wall lineup of excellent cars and trucks, Ford is well-positioned for any shift in the market -- for the first time in a very long time. And more and more buyers are catching on.

And GM? GM's product revival is a few years behind Ford's, a legacy of its collapse and bankruptcy a few years back. And it still has some hard feelings to contend with, thanks to the government bailout that gave it a new lease on life. But its best new products are very good, and the company shows every sign of building on that momentum in coming months.

Long story short: if you're shopping for a new car, be sure to give Detroit's offerings a try. You might be very pleasantly surprised.

At the time of publication, Motley Fool contributor John Rosevear owned shares of Ford and General Motors. You can follow his auto-related musings on Twitter, where he goes by @jrosevear. The Motley Fool owns shares of Ford. Motley Fool newsletter services have recommended buying shares of Ford and General Motors, as well as creating a synthetic long position in Ford.







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33 Comments

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bjw367

Read Consumer reports on how well Ford and GM cars are holding up...Surprise, the same poor quality per the 80's, 90's , and the past 12 years!

May 04 2012 at 8:19 PM Report abuse rate up rate down Reply
Robert

The main point of the article is entirely correct. EVERY study on vehicle reliability and problem areas per new car shows that newer cars are more reliable and problem-free than EVER BEFORE. Look it up - check CR, the NHTSA figures, and every other quality monitoring entity.

For the first time in decades there are "American cars" that are attractive to me. MPG figures are soaring, interiors are more upscale, they drive with Euro-handling and Japanese reliability. Even the styling is looking up (remember when all Ford grilles looked like Gilette razors?)

This time maybe the lessons have hit home...

February 07 2012 at 6:06 PM Report abuse rate up rate down Reply
Craig

This is the second or third time we have had to bail out the auto industry. The reason this keeps happening is becasue the government isn't involved. It'sthe same process every time. The industry rests on its laurals and fails to produce advanced cars. Sales slip to foreign manufacturers, Government bails them out again. the industry is shaken up. streamlines itself, improves the product, sells well then starts to slip again. Suppose the govermnmet funded advanced designs, on all levels. Electric, solar, Smart car types, Hydrogen, Fuel cell, High speed Rail, and let the big obsolete dinosour cars die as the marketplace. Americans wont buy small cars we are always told. yet if we did, the industry wouldnt have to be bailed out every ten years. Likewise, If the industry was not forced to pay for huge medical costs, they would be even more profitable.

February 07 2012 at 3:14 AM Report abuse rate up rate down Reply
1 reply to Craig's comment
rjmjlm711

The reason that it keeps happening is that the goverment is involved.

February 07 2012 at 7:52 AM Report abuse rate up rate down Reply
alderaforall

If these idiots would have done this 20 or 30 years ago the big three would probably never have found themselves playing catch up. Better late than never I guess, too bad it took seeing their company's on the brink of total failure for them to finally get it. And these guys(upper management at the Big Three) are supposed to be business experts, laughable at best.

February 07 2012 at 2:52 AM Report abuse rate up rate down Reply
rt12878104

lets build a ford, or chevy, as we should... get the government the hell out of it!

February 07 2012 at 1:40 AM Report abuse rate up rate down Reply
ty

The only reason they even sold to rental companies is they didn't sell them the consumer crap. A good number of models sold to rentals had iron heads, not the aluminum, they weren't even offered to consumers. The problem is they started marketing to the 2 year trade or lease crowd, any higher hp number was better no matter what the repair and maintenance cost was down the road.

February 06 2012 at 10:48 PM Report abuse rate up rate down Reply
ilebr

Sorry to crap on American cars, but if you are going to buy it, try not to have it longer then the warranty on it. Sell it before it expires, I am sure alot of people will agree on that. And, if you are considering buying a 2012 Ford Focus, be prepared for a compressor failure at 5k miles, anti-freeze tank/bottle to crack at 6k miles as well as a jerky sensation when going over 65mph. I bought mines in October, 2011 and I've been in and out of their service station a lot. I am not satisfy and won't recommend it.

February 06 2012 at 9:42 PM Report abuse rate up rate down Reply
michael

well you can always drive your SUV but there are millions of us that only need a basic inexpensive car to get us back and forth to work and around town..we drive to work 30 or so miles each way and we drive home everyday alone..Like most of us thats all we need to get back and forth to work..

February 06 2012 at 8:43 PM Report abuse rate up rate down Reply
michael

well they started to figure out that they didn't need all the bail out money that they should have fired the ceo and mass produced the 1994 GEO metro 50 HP 1.0 engine,,I bet you they would have sold everytone the built...at a low cost to...

February 06 2012 at 8:35 PM Report abuse rate up rate down Reply
David

oh yes lets get goverment motors in this group for that great VOLT its a very hot car

February 06 2012 at 7:59 PM Report abuse rate up rate down Reply
1 reply to David's comment
michael

isnt that the car that cost 41000.00 dollars and the only people working in America today that can afford to buy the turn the key bang mobile are the 175,000.00 on average a year politicians ask not how your government can save your tax dollars ... and save themselves..but the heck with all the struggling law abiding taxpayers...where did all the used affordable vehicles go and why cant anybody find any used parts anywhere..???

February 06 2012 at 8:40 PM Report abuse rate up rate down Reply
1 reply to michael's comment
cmax383666

Obama is on track to get the best salesman of the year for car sales award.He is making sure there are not any parts out there.You have to buy a new car and once the warranty runs out you will not be able to afford to get the car fixed so you have to buy another one.Sounds great on paper but you have to be gainfuly employed and paid well to be able to buy the new cars.

February 07 2012 at 10:19 AM Report abuse rate up rate down