Ford Australia Reports 2006 Financial Results

[Donut King]

Ford Australia Reports 2006 Financial Results

Ford Motor Company of Australia Limited* today reported a net after-tax loss of $40.3 million for its 2006 fiscal year, compared to an after-tax profit of $148.2 million in 2005. Net sales revenue was $3.3 billion from sales of 114,965 vehicles. Overall market share was 11.9 per cent, down from 12.7 per cent in 2005, resulting from a year-on-year decline in sales of 14,175 units.

"This was an extremely challenging year for Ford in Australia," said Ford Australia President, Tom Gorman. "Numerous external factors had an impact on our overall business, including consumer demand moving away from large family sedans, which drove a reduction in our sales volume.

"To counter this shift, we embarked on decisive actions to realign our workforce and better position Ford Australia for the future, which resulted in a significant one-time restructuring cost. However, Ford remains committed to investment in future products, such as the new Falcon that's due for release next year," said Gorman.

Ford again sold more locally manufactured vehicles during 2006 than any of its competitors, despite a slight decrease in volume. Territory continued its dominance as Australia's top-selling SUV, with 2006 sales of 18,364, and a 31 per cent share of the medium SUV segment. Falcon achieved 2006 sales of 42,390, representing a 32.6 per cent share of the large car market.

"The addition of the exciting, performance enhanced Territory Turbo range and BF MkII Falcon to our line-up continued to stimulate interest in these home grown models. And our expanding portfolio of competitive and fun-to-drive imported products, including the all-new Focus XR5, and the freshened Escape and Ranger, has given us a model to satisfy every demand."

A number of new investment initiatives announced in 2006 will also contribute to the future prosperity of Ford Australia.

Three separate ACART automotive test facilities, the first of which is an environmental test lab at Ford's Proving Ground in Geelong, will help improve efficiency and enhance performance of new vehicles.

During 2006, Ford Motor Company Executive Chairman, Bill Ford, visited Geelong to dedicate a new $25 million Research and Development centre, further confirming Ford Australia's standing as a centre of design and engineering excellence for the Company. This new centre will allow Ford Australia to continue with the development of world-class vehicles for Australia and overseas markets.

In May, in conjunction with the Federal and State governments, Ford Australia announced a new strategic direction, including significant investment in new projects and accompanying facilities, totalling more than AUD$1.8 billion over the next decade.

"We're operating in a rapidly changing environment, but are confident that adjustments we made to our strategy in 2006 have better positioned us for a competitive future," said Gorman.

[Polyal]

meh, on a global scale that isn't to bad.

But I guess you can only judge that on 2007's performance, as those investments would want to start paying themselves off.

[rodderz]

The success of Orion will determine what happens further down the track. It's shaping up to be a very well put together car according to those who have worked in it's program, but in a day where the market is flooded with cheaper asian cars the marketing and brand image will have to do a very good job to keep the local companies in with a job for years to come

[Gobes32]

40.3 million!!!! That is Ford HQ's stationery bill!!!!! On a serious note, if it wasn't for the numerous packages and re-structuring costs, we may have just finished in the positive.

[ClevlndStemer]

Hope 2007/2008 is a good year for them. I hope Orion is something decent that will sell, I hope Ford don't depend too heavily on the Orion Falcon. Here is hoping the Mondeo will be a successful vehicle too.

Ford have a bloody good line up of decent cars it just has to be executed right. Hopefully Orion irons out quality issues from BA/BF.

Good to see R&D too, hopefully some decent technology will be introduced in the not too distant future.

[EviLkarL]

Mah, after my experience with purchasing a Ford, they won't be making any more money out of me, Net lose reflects the companies attitude, both at a net lose.

[prydey]

Originally Posted by Donut King

[font=Arial, Helvetica][color=#000080]Ford Australia Reports 2006 Financial Results


[font=Arial, Helvetica]Ford again sold more locally manufactured vehicles during 2006 than any of its competitors,

what does this statement mean? i guess thier competitors only local product is the one model whereas ford also locally make territory and falcon/fairmont cars. combine these 2 and it adds up to a win. am i correct in assuming this?

[AussieJason]

Originally Posted by Donut King

During 2006, Ford Motor Company Executive Chairman, Bill Ford, visited Geelong to dedicate a new $25 million Research and Development centre, further confirming Ford Australia's standing as a centre of design and engineering excellence for the Company.

Then why doesn't Bill get Ford Australia to design the sedans for the USA ?

His designers back home clearly have no clue and this would have been a perfect opportunity to reverse the fortunes of both Ford USA and Aus.

[AU-MUSTD]

Originally Posted by EviLkarL

Mah, after my experience with purchasing a Ford, they won't be making any more money out of me, Net lose reflects the companies attitude, both at a net lose.

Ford can add the 50 grand loss that l spent over at the general due to there **** poor customer relations and quality. Holdens service is just as poor though but the car's quality is just ahead.

[4.9 EF Futura]

Gotta spend money to make money hey.

Also important to pay entitlements to members of the workforce who are caught up in the restructuring and this probably makes the numbers look worse than they might have otherwise.

Will be worth grabbing the annual reports and looking at the main differences in P&L compared to 05/06. $200mil worse result than last year isnt a *huge* shift when we're talking $3bil turnover.

[Dave_au]

Yeah net revenue is down from 3.9 Billion in 05 and 4.0 Billion in 04, but not too bad considering the B series falcon and Territory is coming to the end of it's product lifespan.

[Bossxr8]

Would be interested how much of that loss is actually money paid to workers who took packages.

[Wokkas]

So is this a $40mill loss on projected profits, or an actual $40mill loss. Usually companies base their losses on how far off their projected they were.

Not too much to worry about considering the research that would be going on for the new model. And no doubt the $25mill Research and Development Center would be funded from Ford Australia's pockets.

With a company like Ford, you can't read too much into fanancial reports.

[Polyal]

Originally Posted by Wokkas

With a company like Ford, you can't read too much into fanancial reports.

Well you can, but afaik we dont get the whole picture.

If a company reports successive losses then thats something to read into.

[NGN 351]

Ford is bleeding money. That is a fact. They only sold less than 8000 cars last month while holden/toyota sold over 14000. Gorman needs to go back to the USA and get someone in who knows how to market what is a good product. Dealers are screaming for F series back, Gorman says there is no business case for it, meanwhile toyota see this as an oportunity and in no time have a V8 Turbo diesel. F sweries competed with nothing, look at resale prices. One would suggest there is a market for them Mr Gorman
I remember when Ford had over 20% market share, now its less than 12%.
I sincerly hope the new Falcon helps them out, diesel territory is a priority, mondeo is actually marketed properly or as usual will it be left to flounder ? The list goes on and on with Ford's inability to market what they have and instead of being reactive become once again a proactive car company !!!

[Dr Smith]

Originally Posted by ngn351

Ford is bleeding money. That is a fact. They only sold less than 8000 cars last month while holden/toyota sold over 14000. Gorman needs to go back to the USA and get someone in who knows how to market what is a good product. Dealers are screaming for F series back, Gorman says there is no business case for it, meanwhile toyota see this as an oportunity and in no time have a V8 Turbo diesel. F sweries competed with nothing, look at resale prices. One would suggest there is a market for them Mr Gorman
I remember when Ford had over 20% market share, now its less than 12%.
I sincerly hope the new Falcon helps them out, diesel territory is a priority, mondeo is actually marketed properly or as usual will it be left to flounder ? The list goes on and on with Ford's inability to market what they have and instead of being reactive become once again a proactive car company !!!

i thought the old F series was dropped due to lack of EuroIII compliant engine and will return when this is the case and a factory rhd model can be built so it's hardly Gorman's fault if this is true.

[ED Classic]

Yeah well they keep refusing to do more export markets like competitors are doing so at a time when you have the oldest family sedan compared to your local competitors you cant exactly expect great results.

There will some cheap BFs being sold soon enough(No I am not looking for one). The territory is about the only thing positive IMO and the Mondeo arriving will be good too especialy if they have the diesel as fuel will probly hit $1.50 Soon.

[DanielXR8]

Originally Posted by AU-MUSTD

Ford can add the 50 grand loss that l spent over at the general due to there **** poor customer relations and quality. Holdens service is just as poor though but the car's quality is just ahead.

Have to agree. 50K of my money went to another brand last year as well. Curious to see what the Orion Falcon is like, but unless Tom stops blaming petrol prices for the companies woes and gets serious about what we all know needs to be done to fix the Ford company in Aus, then it could be a brilliant car, but I won't buy it. Shame, because I can't see why it has to be that way.

[Dave_au]

Originally Posted by Wokkas

So is this a $40mill loss on projected profits, or an actual $40mill loss. Usually companies base their losses on how far off their projected they were.

Actual.

This is the financial report, not the management report.

[TZENU]

I would be inclined to think that the 07/08 will also show a substantial loss due to further R&D...
However with the release of the Orion this will hopefully result in more positive figures for the 08/09 year...

[MeestaNob!]

Originally Posted by Dr Smith

i thought the old F series was dropped due to lack of EuroIII compliant engine and will return when this is the case and a factory rhd model can be built so it's hardly Gorman's fault if this is true.

Yeah, F series is old an buggered, but a new one is here late next year I think (compliant engine, hopefully not to bodgy interior etc).

F series, even if in limited volumes, is a cash cow. Madness not to get it here.

[Bossxr8]

Drive reported that they spent $73 million on redundencies. If thats accurate they would have made a profit bar that.

[Polyal]

Originally Posted by MeestaNob!

Yeah, F series is old an buggered, but a new one is here late next year I think (compliant engine, hopefully not to bodgy interior etc).

F series, even if in limited volumes, is a cash cow. Madness not to get it here.

Does anyone know what the sales break up per state was for F series?

OT I know, but when I was in tassie I saw heaps, alot more than in Vic thats for sure.

[sleekism]

All I know is that the F-150 is the worlds best selling vehicle and that without the F series Ford would be long broke.

My mate has a F250 work truck 7.3L turbo with blow off you can't beat it!!!!