Ford executives comment on the future of Falcon and Territory

[Brazen]

http://www.caradvice.com.au/153524/f...itory-futures/


5/01/2012

Ford executives extend uncertainty over Falcon and Territory futures

Senior Ford executives have again refused to guarantee the future of Australian-built Fords, admitting the Falcon large car is hindering local sales and suggesting the Territory SUV could eventually be replaced by a global model.

The US company’s president and CEO, Alan Mulally, and group vice president and president of Asia-Pacific and Africa, Joe Hinrichs, continued Ford’s reluctance to commit to the long-term future of the Falcon and the spin-off Territory at the unveiling of the company’s new baby SUV, the EcoSport, in India.

Australian new-car sales figures to be released on Thursday are expected to confirm the worst annual sales yet for the Falcon, down about 40 per cent year on year with fewer than 20,000 units sold in 2011



Hinrichs said he had seen the sales figures and admitted the Falcon’s performance had dragged down the company’s overall sales performance.

“The interesting thing about Australia is that the new [Ford] products have done well for us but of course the Falcon sales decline has kind of offset the [success of the] new [imported] products,” said Hinrichs.

“The [large car] segment got smaller and our share of that segment got smaller – that’s two reasons [for the Falcon’s decline].

“Some of that is we made a conscious decision not to participate in some parts of the segment that weren’t attractive to us… some of the fleets [business] we’ve got to do better as a brand.

Hinrichs says Ford needs to “shore up” Falcon and Territory sales while continuing to grow sales of imported products such as the Focus small car and forthcoming Fiesta-based EcoSport SUV.

He says the Falcon’s sales numbers are lower than Ford would have liked while also admitting it was difficult to know when or if sales of the large car would eventually stabilise.

“We’d like to see Falcon rebound but we don’t know where the [large car] segment is going to go. The segment declined this calendar year faster than we expected.

“I think Territory has more opportunity to rebound than Falcon, if I were to be pragmatic about it. But we’ll see how [the four-cylinder turbo] Ecoboost [engine] performs with the Falcon.”



Hinrichs said the Falcon’s current sales were only sustainable for now.

“At the current investment cycle that we’re in, the answer to that is yes [it is sustainable at current sales level]. Not forever … and we’ll more to say over time on that.”

“It is a very important part of our product portfolio Australia. Is it as important as it was five years ago, no.”

Hinrichs said people shouldn’t underestimate the importance to Ford of both the Falcon and Territory, but the company’s group vice president hinted the Falcon-based SUV may eventually become a victim of the One Ford strategy that sets out to establish a single model for every global market.



“We just made major investments in Territory for a reason. We have intentions of that being part of the portfolio for many years to come.

“I think eventually it won’t sustain itself but that’s not in the near term. We’ve made investments in Territory and we’ll continue to make investments in Territory. It’s a very important product for us in Australia.”

Ford boss Alan Mulally reiterated his love for the Falcon but wouldn’t provide an update on what Australia’s involvement would be for the next-generation model due in about 2016.



Mulally told Australian media on the eve of the 2010 Detroit motor show that the company was no longer looking to build unique vehicles for different markets and hinted strongly this week that the next Falcon will sit on a global platform.

“Our large-car strategy is the same,” said Mulally. “Ford is going to have a complete family of vehicles: small, medium or large, utilites and trucks.

“We’re going to have a Taurus-sized platform. We’re going to have a large sedan going forward.

“Based on what you just said [about poor Falcon sales in 2011] you can see why the Ford strategy is so compelling.

“Global platforms, global scale… that’s why it’s so competitive worldwide.

“With Fiesta, we’re going to make about two million vehicles off the same platform. On the Focus platform alone we’re going to have about 12 different top-hats [exterior body designs].”

[Fordman1]

2016 - 17 ? Yep I'm betting gone !

[Polyal]

Hmmm there are some positives and negatives all throughout that.

Atleast they admit to having to do better with fleets and having pulled out of some segments has hurt to their robustness.

If EB4 and LPI cant address these then its all too late....im not giving up hope on a GWRD car though, the Ford brand needs it IMO.

The catch22 is Ford dont really seem to have an answer yet, the longer it goes the worse news it will be, and the press will hound them and scare monger until they get an answer which in turn hurts Ford.

[Gobes32]

A lot of subtle hints there, my money is that Falcon and Territory are gone, but they don't have the future vehicles to succeed them just yet. What I want to know is where does Ford Australias manufacturing future stand? Would people buy a aussie built Mondeo/Fusion? If Territory goes, will we be offered the new Explorer?

[Falcon_Crazy]

Whilst I love my Falcons, provided Ford Oz have a large say and development (like they did for T6 Ranger), then its not going to be "all" bad.

No way they can keep going with Falcon being on its own here Oz/NZ and sparingly in Sth Africa..just not commercial.

[gtfpv]

i guess the car markets are looking pretty bleak . i just went down to holden for a looksy , and they had no SS commadores to show me ( zip, zero,none) . they were 42k driveaway 2 months ago . all sold out . but guess what SSV'S avail and hsvs sitting there , i think i was the only customer walking around , a salesman never approached , i had to walk in the office and ask . no SS's to show you , nothing to drive , but if you want an ss we can order a 2012 one at 44k driveaway , we just cant show you one and have none for you to drive . needless to say away i walked .
ford arent offering anything in the 40's bracket accept maybe xr6t . but no MKII's yet the territory ts maybe . the fg is kind've suffering old model status now , like the VE .

[Gobes32]

Originally Posted by Falcon_Crazy

No way they can keep going with Falcon being on its own here Oz/NZ and sparingly in Sth Africa..just not commercial.

Thats right, the best they can hope for now is for Ford Oz to have input in designing a Mustang chassis that can have a Falcon top hat placed on it. Or maybe the market determines that a 4 door mustang is viable? Ford Oz did a good job with Falcon for the development funds they received, however, you cannot argue that with the huge budget that comes with global development costs, we won't all be bettter off as consumers?

[Gobes32]

Originally Posted by gtfpv

no SS's to show you , nothing to drive , but if you want an ss we can order a 2012 one at 44k driveaway , we just cant show you one and have none for you to drive .

That is interesting, because basic mathematics suggests that Holden have an oversupply of vehicles in the pipeline somewhere.

[Polyal]

^^^Which is win win in my book, once the Falcon taps into a global platform then it will have access to more bells and whistles.

Making a Mondeo/focus/whatever here makes zero sense IMO, other Asia Pacific places can do it cheaper. Plus with EB4 and LPI who needs a Mondeo once a "GRWD" car gets all the goodies.

[Road_Warrior]

Look who the author of the article is.

[Scott]

I thought there would never come a day that I didn't need a Falcon/Commodore type car in my driveway.... but it has been here for a couple of years.

I simply don't need or want that type of car since having kids. I want an "all in one" machine that does everything from the shopping to running up the beach to returning great economy - and there are plenty of options out there.

Kill it in its current guise, get on the global platform and start making better profits.

[csv8]

Sunday Mail 01/01/2012 said "Mondeo will replace Falcon !!!!" No one really knows and those that do are keeping very quiet....

[Polyal]

Originally Posted by Road_Warrior

Look who the author of the article is.

Didnt know Jez was in bed with Douwling and Gover, did you read the latest AMC magazine? Quite an interesting piece with Gover defending himself.

I lost a little bit of respect for that mag when I found out those blokes were writing for them.

I dont think that article is overly scaving.

[BA-XT]

Is the equivalent Ford Falcon in America the Taurus? It looks simlar to the FG range and is using the same Eco Boost engine. It will also come with a 3.5L twin turbo V6 Eco boost engine as well.

Hasn't Holden always done it with the Commodore except the VE? I'm sure Ford Australia can adapt it to suit our crummy road conditions.

I quite like it. I was concerned this might happen, but after looking at the ford america website i say bring it here! Sad to see the straight 6 engine go.

Plenty of warm and fuzzy stuff as well that isn't available here. Looks promising! You can see the FG was styled of the design as well.

[MercurySilver]

i heard holdens were down to a single shift again
or have dropped a shift
one or the other

[dimka100]

Well with the Falcon selling a total of 18,741 cars in 2011 I seriously can not see the business justification to keep investing more money into R&D ... and I think that's exactly what Ford's president Asia Pacific and Africa Joe Hinrichs said: "At the current investment cycle that we are in the answer to that is yes." - Ford is happy to keep selling the Falcon as is since all the development is already complete and paid for, but its very unlikely that more development dollars will be spent on this model unless its sold glabally.

[LethalLeigh]

I look at this and it brings back memories of the stories behind Mitsubishi's commitment to the local market. The ABC had published stories of their imminent closure for 8 years before it happened but it was almost like the press willed it to happen.

With a conscious decision to not participate in certain fleet markets it comes across that they wanted to wean customers off of the Falcon if it were to disappear. The taxi market in particular.

[stevz]

You don't have to be a rocket scientist to see that there is only bad news to come from this. If there was good news, Ford would be shouting it out from the rooftops, not beating around the bush with endless spin.

[Nikked]

Originally Posted by dimka100

Well with the Falcon selling a total of 18,741 cars in 2011 .

...then the territory don't forget...

[Road_Warrior]

Originally Posted by Polyal

Didnt know Jez was in bed with Douwling and Gover, did you read the latest AMC magazine? Quite an interesting piece with Gover defending himself.

I lost a little bit of respect for that mag when I found out those blokes were writing for them.

No I didn't see it - care to share?

[69Mach1]

So I shouldn't bother holding out for a 5.0 XR8.....

[mik]

from a business point of view you would be a fool to guarantee any product beyond a year or two with the world economics and changing markets , might as well ask the CEO what the weather is going to be in 2016.

[Chopped]

Holden is not the enemy, they are in the trenches with Ford.
The enemy brands come from Japan and Korea.

Sad days...but all things must end I suppose.

[Soulsearcher]

If Ford does wind up local manufacturing operations in the next few years it's going to impact negatively on Holden (and to a lesser extent Toyota).

The reason for this is that a lot of the component suppliers supply all 3 of the car companies (Ford / Holden / Toyota) & spread their overhead costs across each unit sold.

Toyota has the advantage that they assemble a global product and could conceivably import components (further increasing the cost pressure on locally manufactured components) in the short term / medium term.

Holden having a unique product doesn't have the same options as Toyota on a large part of their components and will either

- absorb their suppliers costs (although there'd be some reduction from lowering production but not on a 1:1 ratio) & either increase the prices of their vehicles or make less profit / unit sold.

- Looking at sourcing more components from overseas, but with the leadtimes involved it would need to be started sooner rather then later

- Review their Australian operations like Mitsubishi did.

For Australia to continue competitive manufacturing operations it needs to be able to produce & sell a certain amount of volume each year (whether its spread over a single manufacturer or all 3). The large vehicle segment has been on decline for a number of years now and it's going to be difficult to arrest, let alone claw market share back. The only way that I can see local manufacturing being here in 20 x years time is to build cars that people want to buy and whether you like it or not in today's climate that's small to medium & probably with a starting price under $30K.

[stevz]

Originally Posted by Chopped

Holden is not the enemy, they are in the trenches with Ford.
The enemy brands come from Japan and Korea.

We are our own worst enemy when you come to think of it. Have a look around this forum, people who are suposed Aussie car fans spruiking foreign garbage like Skoda as if it was the best thing since sliced bread, whilst rubbishing the local product. Then we wonder why manufacturing in this country is going down the toilet. Go figure.

[Brazen]

Something like the Focus is perfect to build here as you can then build the Kuga off it too. Also with the release of the electric and hybrid Focus being released there would be serios government cash to get the projects going.

[Cheech]

Can't see car manufacturing taking place in OZ in the near future.....

Aust has one of the highest costs of living in the world and as such high rates of pay. Our labour costs can't compete when compared to SE Asia.

Aust has a free trade agreement with the US and pretty much all of SE asia under AANZ free trade agreement (ASEAN). General duty rates have been lowered progressively over the last 15 years. So the protection through duties that our car industry once had will be gone eventually.

From Ford's prespective they would not dream of manufacturing a global car in Australia unless it had no other options. The costs per unit compared to manufacturing in SE Asia would be to high.

The fact that Fiesta is now manufactured in a hub area (Thailand) leads me to beleive that this is the type business model that Ford will follow.

[Polyal]

Originally Posted by stevz

We are our own worst enemy when you come to think of it. Have a look around this forum, people who are suposed Aussie car fans spruiking foreign garbage like Skoda as if it was the best thing since sliced bread, whilst rubbishing the local product. Then we wonder why manufacturing in this country is going down the toilet. Go figure.

Welcome to the year 2000..its called globalisation

FoA, I think (correct me if I am wrong), dont have the capacity to build large numbers anyway. So why would you build something here that you can in Thailand et al. The falcons decline has alot to do with its market perception than its engineering ability. I mean when the mondeo is sitting in the same showroom, and has more tech and is cheaper then it makes life hard.

Perhaps the damage is done, and if GWRD goes ahead a name change wouldnt hurt.

[Brazen]

Originally Posted by Cheech

Can't see car manufacturing taking place in OZ in the near future.....

Aust has one of the highest costs of living in the world and as such high rates of pay. Our labour costs can't compete when compared to SE Asia.

Aust has a free trade agreement with the US and pretty much all of SE asia under AANZ free trade agreement (ASEAN). General duty rates have been lowered progressively over the last 15 years. So the protection through duties that our car industry once had will be gone eventually.

From Ford's prespective they would not dream of manufacturing a global car in Australia unless it had no other options. The costs per unit compared to manufacturing in SE Asia would be to high.

The fact that Fiesta is now manufactured in a hub area (Thailand) leads me to beleive that this is the type business model that Ford will follow.

Wages are only a small component of a vehicle's cost, there are many other factors. Nowadays Goverment support is the main driver. Look at expensive England, they have had a massive resurgence in their local car making - but their government provides more support per head of population than our government.

similarly Thailand government provides massive support for their local industry.

[Cheech]

Originally Posted by Brazen

Wages are only a small component of a vehicle's cost, there are many other factors. Nowadays Goverment support is the main driver. Look at expensive England, they have had a massive resurgence in their local car making - but their government provides more support per head of population than our government.

similarly Thailand government provides massive support for their local industry.

Agreed when it comes to manufacturing a car.
You also need to add the labour cost all the way along the supply chain as well. And... then the wages of FoA. Ford will look on the operation as a whole.
If the case is that they can make more money from shifting production OS, they will likely do it. Its likely that actuaries have already run the numbers and signed off on it.

Aussie government has also committed to getting themselves back to surplus, which means less $$$ to be handed out.