Supporting Australian car industry (a hypothetical)

[flappist]

Well after the next election I will be Prime Minister and I am planning my policy to support local car manufacture, particularly Ford.

As I see it Ford Falcons face a couple of issues that may dissuade potential buyers.

1) They have rather average build quality and tend to start falling apart after 100,000km/3 years.
2) They have rather ordinary resale value compared to many other products.

So here is my plan:

All Government at all level purchases of vehicles will be Australian biult vehicles unless there is a requirement that cannot be met.
The price paid will be full retail.
The manufacturers will provide a 5 year/250,000km warranty.
The vehicles will be kept by the departments until they are 250,000km or 5 years old and then they will NEVER BE ABLE TO BE REGISTERED AGAIN.
They can be broken up for parts or used for racing etc. but will not be dumped on the second hand market.

The advantages in this:
1) Less cost to the tax payers
2) Increased resale as there will not be squillions of 1yr/30k old falcons for half new price flooding the auctions.
3) The build quality will improve as now they have to last 5 years or 250k and if all the bits fall off they will cost the factories a fortune.
4) More profit on the vehicles so more care can be taken and it is not just a "cheapest possible" effort.
5) There will be lost of parts available for 5+ year old cars from wreckers and cheap vehicles for competition.

The disadvantages in this:
1) The flood of cheap second hand falcons will stop forcing the current buyers to buy new or pay a reasonable price helping the first buyer to buy another new one.
2) The actual number of vehicles sold may drop although profits should go up.

So what do you think?

Do public servants deserve new cars every few months regardless of how they are treated or should they have to actually look after their cars?
Should the primary market for Falcon be ex-gov auction vehicles?

And of course there is a poll

[AMGC63]

Nice idea.. the other off spin is LPG conversions and consumption would die in the bum...

[SteveJH]

How about Taxi's must use new cars and cannot be registered after however long they are allowed to be used as taxi's?

Not like they are worth much after they have done 800,000km or so anyway.

[jpd80]

The way i understand the present arrangement:

1) governments buy cars at fleet discount prices
2) they run them for 40,000 and then dispose of them
3) the disposal price is approximately $5,000 short of purchase price.
4) retail buyers get the opportunity to buy lots of low klm late model vehicles.

If governments purchased new vehicles at full retail but kept them
for roughly six times the mileage, that would:

1) reduce annual fleet purchases by government to one sixth of present...
2) since 75% of Falcons are fleet purchases, that would have a devastating effect on sales.
3) While those high klm ex-govt vehicles would leave the system, retail buyers would have
no low cost near new vehicles to buy.

A lot of people on tight budgets cannot afford the luxury of a new vehicle, state and federal governments knows this,
major auto brands know this and that's why the system exists - to generate additional volume for auto plants
while providing low cost volume sales to fleets which in turn dispose of them as affordable vehicles to low income earners.

[Franco Cozzo]

Originally Posted by flappist

Do public servants deserve new cars every few months regardless of how they are treated or should they have to actually look after their cars?
Should the primary market for Falcon be ex-gov auction vehicles?

And of course there is a poll

The old man works at Centerlink (Sorry, "The Department of Human Services Centerlink") and all their company cars are Camry's, not even Commodores, I think in this case it would be a good idea to support the locals more.

The Amubulances here in Vic go for about 250,000km these days before they get newies, so I don't see why all the other government departments can't keep their cars longer.

I don't agree about not being able to be registered again though, especially if they're going to keep them for ages anyways.

[flappist]

Originally Posted by jpd80

The way i understand the present arrangement:

1) governments buy cars at fleet discount prices
2) they run them for 40,000 and then dispose of them
3) the disposal price is approximately $5,000 short of purchase price.
4) retail buyers get the opportunity to buy lots of low klm late model vehicles.

If governments purchased new vehicles at full retail but kept them
for roughly six times the mileage, that would:

1) reduce annual fleet purchases by government to one sixth of present...
2) since 75% of Falcons are fleet purchases, that would have a devastating effect on sales.
3) While those high klm ex-govt vehicles would leave the system, retail buyers would have
no low cost near new vehicles to buy.

A lot of people on tight budgets cannot afford the luxury of a new vehicle, state and federal governments knows this,
major auto brands know this and that's why the system exists - to generate additional volume for auto plants
while providing low cost volume sales to fleets which in turn dispose of them as affordable vehicles to low income earners.

So what you are saying is that it is better to have Falcon as a cheaply made low quality car that relies on large numbers of low profit sales and than to improve the quality and make Falcon a world class vehicle that may even be good enough to export?

[AMGC63]

Personally id be happy to see Ford drop the XT full stop and upgrade the image of the product, keeping resale high and losing the "budget" and "taxi" stigma will help. Keep the govt vehicles out of the clutches of bargain hunters will also help. Hyundai have managed to do it as have Toyota/Lexus.

[Windsor342ci]

Originally Posted by Big Damo

The old man works at Centerlink (Sorry, "The Department of Human Services Centerlink") and all their company cars are Camry's, not even Commodores, I think in this case it would be a good idea to support the locals more.

The Amubulances here in Vic go for about 250,000km these days before they get newies, so I don't see why all the other government departments can't keep their cars longer.

I don't agree about not being able to be registered again though, especially if they're going to keep them for ages anyways.

Completly agree with your statement whole heartedly! My thoughts exactly start to finish!

[Racecraft]

Originally Posted by flappist

So what you are saying is that it is better to have Falcon as a cheaply made low quality car that relies on large numbers of low profit sales and than to improve the quality and make Falcon a world class vehicle that may even be good enough to export?

Yep... as new you get warranty, ie: it cost you no more money only time at the dealer---> the cheaper outlay and viability of high volume sales is more attractive in the marketplace...

World Class and quality is a moot point when the car is second hand.. If someone wants to buy 2nd hand to save a shilling on depreciation but then spend the coin to fix the reliabity and quality issues then let them... Ford Oz can take the higher volume less margin profits to the bank

[jpd80]

Originally Posted by flappist

So what you are saying is that it is better to have Falcon as a cheaply made low quality car that relies on large numbers of low profit sales and than to improve the quality and make Falcon a world class vehicle that may even be good enough to export?

Seeking an export market for Falcon is as futile as wanting to build another XR8 for the sub $50K fan market.
I'm not saying it can't be done but is the outlay worth it for the potential returns?

When you imply that:
Falcon is only a cheaply made low quality car that relies on large numbers of low profit sales,
Just remember that Falcon products span several segments from low cost to high priced sedans,
profitable diesel SUVs and a mix of work and play utes..

[Scott]

Forcing the Govt to buy Australian would not improve build quality at all. We have seen what limited or nil competition does to a market.

Ultimately, manufacturers would wind the price up, squeeze costs down and come up with the same warranty excuses they do today.

You have been able to buy extended warranty for ever, but we still all talk about the poor, and just plain neglectful build quality of some mainstream Australian cars.

I can't see where the cost savings would be either. The Govt would be forced to pay an exceptional premium on the purchase, they'd have to wear an almost total loss on the scrapping of the car, they'd have to maintain an ageing fleet, pay excessive carbon tax on their higher output and ignore the sweet deals from overseas.

I feel the vibe Flap, but that's about it I'm afraid.

[mik]

i like the idea of govco buying australian manufactured cars only, it supports our steel industry and other suppliers down the line as well.

[new2ford]

There isn't a poll option for designing them in Australia and manufacturing them overseas in a country that can provide good manufacturing quality!

[flappist]

Originally Posted by new2ford

There isn't a poll option for designing them in Australia and manufacturing them overseas in a country that can provide good manufacturing quality!

If they are not made here then why would we care.

The idea is to support the Australian car industry.

[69Mach1]

I think we all want to find a way to make Ford more successful in Australia, ie sell more Falcons, because its the product we love and we want to see them continue. The simple fact remains that their locally manufactured competitors are still viable and selling cars. IMO this means Ford is simply not doing a good job. If (or when) Falcon dies, it will be the fault of Ford, not the government, not the buying public or businesses. As we all know, if a business does not move with the times and react to what the market wants they get left behind. It's survival of the fittest.

[2011G6E]

Nice idea...but it would need to be linked to protectionist policies which would badly affect our balance of trade.
Only way that would work is to ban the import and sale of all foreign motor vehicles...people can't be "forced" to buy a Falcon at full price. Many motorists really rely on the "flood" of second hand very late model low kilometer government owned vehicles entering the sales pool every year or two. People who would never be able to afford a brand new Falcon/Aurion/Camry/Commodore see it as a good opportunity to be able to have a relatively "new" car for a fraction of the cost.

Falcon isn't the only car on the market...even within Ford. I would never have considered something like the Mondeo, never even bothered to test drove one when we were in the dealership...but when we took our G6E in for it's first service, they loaned us a Mondeo diesel auto. Honestly, if I'd have test driven one of them before buying the Falcon, we'd have a Mondeo Titanium (probably the excellent wagon version) in the driveway right now...

[Lotte]

i've been thinking about ways the government could support the Aussie car industry better myself, and as far as I knew, I was going to be the next PM, *shakes fist*

One idea I had was reduced rego for Aussie cars. As opposed to extra reg for imported cars (but eff it, they can do that too), provide a x% off cars newer than 5 years, and a reduced % off cars older than 5 years that are built in Australia. And then they can take more off for Aussie cars on dedicated gas, because that's the kinda gal i am.

[Magna]

Originally Posted by Big Damo

The old man works at Centerlink (Sorry, "The Department of Human Services Centerlink") and all their company cars are Camry's, not even Commodores, I think in this case it would be a good idea to support the locals more.

at least the camrys are made here, at defence the car parks used to be full of falcon and commodore wagons now its klugers and hyundai imax people movers arghhh

[flappist]

Originally Posted by 2011G6E

Nice idea...but it would need to be linked to protectionist policies which would badly affect our balance of trade.
Only way that would work is to ban the import and sale of all foreign motor vehicles...people can't be "forced" to buy a Falcon at full price. Many motorists really rely on the "flood" of second hand very late model low kilometer government owned vehicles entering the sales pool every year or two. People who would never be able to afford a brand new Falcon/Aurion/Camry/Commodore see it as a good opportunity to be able to have a relatively "new" car for a fraction of the cost.

Falcon isn't the only car on the market...even within Ford. I would never have considered something like the Mondeo, never even bothered to test drove one when we were in the dealership...but when we took our G6E in for it's first service, they loaned us a Mondeo diesel auto. Honestly, if I'd have test driven one of them before buying the Falcon, we'd have a Mondeo Titanium (probably the excellent wagon version) in the driveway right now...

Which is the point of this exactly.

Reasons to not buy a new Falcon:
1) You will be able to buy a second hand one in 12 months for almost half of new price.
2) If you buy a new one in 12 months it will be worth almost half of new price.

There is a mentality that everyone has the right to own whatever car they want regardless of whether or not they can afford it and if they can't afford it then it must be made available cheaper at other people's expense.

I want a Porsche Turbo and am prepared to pay $80k (paid off over 7 years with a $79k baloon) for a 12 month old one with low kilometres.......so make it happen.....

The basic XTs are very plasticy and agricultural (I own one) as they are made for the fleet market who do not care what happens after a year or two, just cost of ownership during the cycle.
The models above suffer from being based on a basic XT and exhibit the same problems to a greater or lesser extent.

In the last decade I have owned a AU2 Ghia, GT-P, 2xF6s all bought new, all spent a lot of time in warranty repair and all sold after 2-3 years (1 F6 after 6 weeks) because they were starting to fall apart) at huge losses.
I bought my wife a 4 year old BA2 XT for $9k. It needs regular money injections to keep it going (at the moment it is getting the electronic door lock replaced, pax internal door panel replaced & roof lining repaired).

My datto is nearly 4 now and just keeps on going with no problems. I look at friends/associates vehicles and I see a common theme.
Those who have Falcon/Commodore do not keep them for long periods and often replace them with something else.
Those who have Japanese/Korean/Euro tend to keep them for longer periods and almost always replace them with another similar car.
The same seems to apply to Mondeo/Focus buyers

Please note I am talking about those who have bought/buy new not used cars.

I often go into bat for Falcon and apart from the odd holden bogan who would not own one if ther were free and faster than a Veyron the usual reply is they they fall apart and have no resale.

Resale is not important unless you want to sell. For most people if the car is doing the job and reliable then it need not be replaced so buying a new car is a long term investment.

One of the issues with asking this question on here is that nearly all on here are Falcon enthusiasts and through their "cerulean coloured glasses" never quite see any problems with Falcon that may be more apparant to the wider community.

I suspect that some may think it more important that they can buy a discounted Falcon personally than the marque evolve but Darwin has shown us what happens to things that don't evolve and if you need any evidence go to a MOPAR club meeting and ask about Valiants.

My thread is just an idea I had based on my views as to why Falcon is not as successful as I belive it should be. I may be wrong (well there is a first time for everything ).

[Brazen]

Do public servants need a car the size of a Falcon? Rear wheel drive large sedans seem pretty extravegent for a government pool vehicle to potter around the suburbs. Really something like a Cruze diesel is all a public servant needs for about $10 grand less than a Falcon and probably better resale.

To increase sales for Falcon all you need to do is just halve the FBT rate for Aussie made cars - no tricky policies, that way you target people who change over cars often improving volumes. And as you are targeting user-choosers they go after a richer model mix which helps resale rather than targeting a government department which buys 100 identical white LPG Falcon XTs and floods the market at auction time.

[Jim Goose]

5yr lifespan?
Few things come to mind... waste of resourses, plastic (petrolieum based), not to mention the steel and other alloys.
No way in the world anyone would support this.
If its designed to last 5yrs then its build quailty certainly wont change.
No incentive to improve quality or improve manufacturing as your basically sayin we will buy your product no matter what.
No real need for large cars being driven around by fat public servants.
Creating an "elite" name for the car... as your saying the public cant own it after its been thrown out. (it is afterall, tax payer money)
Which will create more public outrage at wastage (something which governments do VERY well on all levels).

[2011G6E]

Too much choice?

It's actually quite hard to buy a "bad car" nowadays...no matter your preference, big or small, there is a bewildering array of great cars of all sorts from all over the world.

Of course we could go back to the "Button Plan", and be restcited in what we are allowed to drive to protect the car industry here...as long as you don't mind having much choice in what you drive...

[allanv6gt]

*Somewhere above was said "% rego discount for Aussie cars" = tariffs revisited.
* My last SES Officer at Centrelink had a Holden Commodore.....so don't know where Camry comes into it - buyer choice? Was changed every 40K kms.
* Government car policy may well be aimed at OZ bullt )to support industry etc etc), but not much choice in Oz built these days - Falcon platform range, Commodore, Cruze, Camry...any I've missed? We live in a global economy.
* Looked at Falcon XR6...and bought Mondeo XR5 Turbo. No Falcon test drive necessary. I've owned two Flcaons in my early driver days. Seems they are just not up to market requirements nowadays (read: technology).
* Cars sell because of desirable product to buyer, right price, effective sales people. Needs all three to create sales volumes.
* And no, you don't see cars rusting before your eyes (e.g. '70s Fiats...sorry), eor xploding as you drive down the road (Datsun 120Y popular myth), are bent on killing the driver (Ford Pinto, Leyland Marina 6cyl). Even a Getz (bargain big seller) is great compared to things of 30-40 years ago.
* For some manufacturers, quality and features are 'just enough' to ensure required volume to maintain profit margins. And gives an easy path for model upgrade (add a few goodies and new plastic pop-in grille). Other makers have different philosophies, and anyway, OZ tends to see the higher spec imported models only due to low sales volumes requiring high margins. Visit Germany, Mercedes as Taxis !!!
Enough of my rant...time to vote.

[jpd80]

Originally Posted by flappist

Which is the point of this exactly.

Reasons to not buy a new Falcon:
1) You will be able to buy a second hand one in 12 months for almost half of new price.
2) If you buy a new one in 12 months it will be worth almost half of new price.
.

3) there are much better alternatives than buying a large sedan....

As large cars have steadily declined, there has been a corresponding increase in:
1) Light car
2) Small cars
3) Small SUVs
4) Mid sized SUVs

So basically you could do this or that to falcon, increase quality, all those things and still it wouldn't sell in increased numbers..why?

Answer: Because the world has moved on from large cars dominating the market, Ford knows that the best strategy is to develop
new vehicles in other segments, Territory is a good example of how a "Falcon" can get higher sales and compete in a different market...

[dimka100]

I’m sorry OP but your idea is very much out of line with the general democratic and liberal economy vibe … essentially your idea would give far too much power to local manufacturers and this would do nothing to improve the quality of their product or make it cheaper … In reality laws that force an entity into something specific are never ever good!

In order to help the Australian manufacturers the Government needs to make them more competitive in the Australian marketplace to do that they can implement the following:

1. Removal of Luxury Car Tax from any Australian manufactured vehicle (or a significant reduction in the %).
2. Removal of Stamp Duty from any Australian manufactured vehicle (or a significant reduction in the %).
3. Reduction in the price of car registration – this would not be easy as it’s a state tax
4. Relaxation of the some of the emissions regulations that Australian Manufactured cars must comply under. E.G. Australian cars EURO 4 minimum but any import must say be EURO 5 as minimum …

As for fleets, well I’m sorry but they are privately owned companies and they can choose to buy whatever cars they like!!! It’s up to the manufacturer to make their cars more attractive to fleets by offering them good deals and other benefits … OFCS the suggestions I listed above would make Australian made cars cheaper, hence more attractive for fleet buys as cost is their major factor, hence more Australian made cars would be sold …

As for the poor Ford resale value … well I’m sorry but that’s an issue Ford needs to solve! Having no clear separation between the private / fleet models is not helping. Having massive overinflated RRP vs the actual car prices is stupid. Having limited edition models that offer 10K worth of value is silly …. You get my drift …

[Stefan]

TOP idea Pime Minister, you managed to Increase the Price of full size family cars for the average family struggling to make ends meet.........

[Polyal]

I can see the goal your going for flappy but I tentatively agree with dimka100, which doesnt happen often. Why we tax out own cars so much is odd, I know their volume is high so Gov gets some good revenue out of it but still, if they were serious about moving local cars then this is a quick and easy option.

IMO bugger imports. If people cant handle the "quality" of local cars then get something else and I am not overly phased how much it costs them. We are one of very few modern economies in the western world that still have an auto industry as such, and it will die sooner or later if some steps are not taken.

I also dont think that the Gov should go to far with that either, they need to have solid business plans, but support is needed. I think we have to sometimes step back and remember our place in the global economy. We are a small island that punches above its weight, that doesnt mean that our products need to be globalized or even can be efficiently.

[2011G6E]

The reason we "tax our own cars" is because we don't work in isolation anymore...we have to bend to the will of the world economy.
Anyone else remember a few years back when the federal government gave economic assistance to some parts manufacturer...I believe some mob that supplied interior fabrics or something...and they got hammered by some overseas legal attack that they were being "protectionist", and had to back down.

We can't pass laws that overly protect our local industries anymore...just doesn't happen. If they try to, the world trade organisations will mount a legal challenge...for example, why do you think we now see New Zealand apples in our stores even though we have no need to import them, and had the very best reasons for banning their import for decades? It was because the world trade mob said it was unfair for us to keep them out, even for disease control reasons.

[Polyal]

So we cant run our country as we see fit? There is something fundamentally wrong with that. We need some leaders with a decent set of stones.

[flappist]

Originally Posted by 2011G6E

The reason we "tax our own cars" is because we don't work in isolation anymore...we have to bend to the will of the world economy.
Anyone else remember a few years back when the federal government gave economic assistance to some parts manufacturer...I believe some mob that supplied interior fabrics or something...and they got hammered by some overseas legal attack that they were being "protectionist", and had to back down.

We can't pass laws that overly protect our local industries anymore...just doesn't happen. If they try to, the world trade organisations will mount a legal challenge...for example, why do you think we now see New Zealand apples in our stores even though we have no need to import them, and had the very best reasons for banning their import for decades? It was because the world trade mob said it was unfair for us to keep them out, even for disease control reasons.

Yes I am just finishing my business plan for "Flappist's toads, snakes, crocks and spiders shop" in Auckland. It is perfectly safe and no nasties are going to escape and run amok in the scrub.........

As far as the "average battler buying a car", how about a "First family car buyers grant" that provides what was the difference between a new car and ex government available once and the car cannot be resold for 5 years?

Many seem to forget that all fleet cars are not government, car rental companies and private fleets will not be affected by my plan in fact it will make Falcons a better option as they will have better resale so that may increase the number of Falcons sold.