Ford vows to stage comeback

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[FONT="Tahoma"]Horror start to 2012 caused by temporary supply problems, claims Ford

20 February 2012

By HAITHAM RAZAGUI...LINK

FORD Australia has high hopes of bouncing back to sales growth this year following a shaky start
to 2012 in which most models except the Focus small car, Territory SUV and Transit van delivered a
double-digit dip in volume.

The Blue Oval’s 5838 sales in January were down nine per cent – following a 4.2 per cent
full-year decline in 2011 – but Ford executives are optimistic that a recovery will take place
in coming months as supply constraints for volume-sellers like the Ranger and Focus are overcome.

Natural phenomena were to blame for the new Ranger’s slow start and the Falcon’s worst-ever
sales month as suppliers to Ford’s factory in Thailand were hit by floods that affected several
manufacturers – worst of all Honda – while Melbourne’s Christmas Day hail storm damaged
around 2000 MkII Falcons and numerous Territorys as they awaited their final inspections
before being shipped to dealers.

Ford Australia communications and public affairs director Sinead Phipps told GoAuto that Falcon
sales are expected to take off again next month once stocks of the recently facelifted car
are sufficiently replenished, aided by the presence of the LPG-powered LPi version, while the
four-cylinder EcoBoost version also promises to increase sales once it comes on stream after Easter.

Ms Phipps said supplies of the Thai-built Fiesta light car were not impacted as badly as
the Ranger because it uses fewer locally sourced parts.

For the same reason, shifting Australian Focus production from Germany to Thailand
is still on track for June.

Ford Australia general marketing manager David Katic told GoAuto that, although the Ranger factory
is on a hill and was not affected by the floods, several suppliers had been submerged and some
resorted to sending divers into the flood waters in a desperate attempt to salvage equipment.

He also said limited supply of diesel engines for the Mondeo mid-sizer is hurting sales because that
fuel type accounts for such a high proportion of the model’s local volume.

The next-generation Mondeo will continue to be sourced from Europe but Mr Katic said
U]moving production of Ford’s mid-sizer to Thailand would not help because the
diesel engines are produced in Europe and the company is not about to invest in a
diesel engine manufacturing facility in Asia, where petrol engines are preferred[/U].

Globally, Ford is rapidly expanding its capacity to produce efficient, downsized EcoBoost
petrol engines and Mr Katic agreed that eventually there is likely to be a swing back to petrol
power as tougher emissions regulations make it increasingly difficult and expensive to
develop diesel engines.

Some Australian Focus customers are also facing delays as the European factory struggles
to cope with demand. Mr Katic said that, until the Thailand factory comes online, the Focus
– which with 1576 sales in January achieved around 900 fewer units than the locally-built
Holden Cruze – will struggle to reach its sales potential.

The Focus ST hot hatch that will replace the previous-generation XR5 Turbo in the fourth quarter
of this year is likely to be sourced from Europe.

Mr Katic said limited supplies from Europe, the flooding in Thailand and Melbourne’s hail storm
meant the only vehicle Ford Australia could rely on stocks for last month was the Transit van –
sales of which were up 36.6 per cent.

As more of Ford’s model line-up falls into line with its ‘One Ford’ strategy of developing vehicles
for the global market – which could spell the end of the local Falcon and Territory – the company
is expanding its production capacity in Asia to satisfy local demand.

The factory from which Australia will source the Focus is close to completion and several
new factories are being built in India. The EcoSport sub-compact SUV will become Ford Australia’s
first Indian-sourced vehicle when it arrives in the second half of next year.

Ms Phipps said moving production to Asia gives Australia and other countries in the region
more control over supply.

It has taken until now for the brand’s local arm to secure just 200 Kuga SUVs per month from
the European factory – even though it is well into its product life and will be replaced by a
redesigned model in less than 18 months.

The new Kuga will be based on the global C1 platform that underpins the current-generation
Focus, meaning it is likely that Kuga production for this country will also eventually shift to Asia.

Ms Phipps told GoAuto that Ford Australia is able to secure good supplies from Thailand
because it is the Thai plant’s best customer.

She said the company is also confident of getting better supplies for the next-generation Kuga
as Australia “put its hand up early” for the car, meaning sufficient production slots should
be allocated from the outset.