Report: Falcon Fleet Sales 81%

[dannyhilton]

http://www.goauto.com.au/mellor/mell...2577A5000AE348

FOR every new motor vehicle sold to a private customer in Australia so far this year, another has gone to a fleet customer – business, government or rental company – and usually at a healthy discount.

Of sales to so-called non-private customers, roughly half of the vehicles have come from the ‘big three’ local car-makers, with vehicles split to varying degrees between their own locally made products and imports from overseas partners.

The local car-makers will tell you that fleet sales, despite thin-to-invisible profit margins, give them considerable benefits via economies of scale in manufacturing, profit on spare parts and, for their dealers, servicing. Privately, though, they and their dealers wish more of their sales were to private customers, from whom they stand a better chance of wringing an up-front return on every vehicle, even if only through accessories and the like. Profit is usually fatter on the up-spec models preferred by private buyers, too.

When GM Holden launched its VE Commodore in 2006, part of the goal was to lift the top-selling large sedan’s appeal to both private buyers and so-called ‘user-chooser’ business lease customers who, although counted as business fleet numbers, are effectively private purchasers.

Ford, too, was looking to raise the mix of up-market Falcons when its current FG model arrived, to help the bottom-line.

So, how do the local car-makers fare in the private/non-private buyer split?

Starting with the three biggest-selling locally made cars – Holden Commodore, Ford Falcon and Toyota Camry – it is clear that none even get close to a 50/50 split of the general market.

Almost three-quarters of Commodore and Camry sales – 73 per cent for both, to be exact – are made to fleet buyers, with just 27 per cent finding homes with ordinary domestic motorists this year.

But at the Blue Oval, private sales are even weaker, with just 19 per cent of Falcons parked in private garages, and 81 per cent going to non-private owners.

Ford has sold almost 22,000 Falcons to fleets, compared with Holden’s 27,000 Commodore sedans, Sportwagons and Utes, and yet Commodore outsells Falcon by 50 per cent overall. Clearly, Holden is winning more of the hearts and minds of private buyers, as the company intended when it launched the VE. However, the picture is skewed the other way when we look at a couple of derivatives of these two vehicles.

The private share of Ford’s Falcon-based Territory volume is 28 per cent, reflecting its appeal to families, while the private share of Holden’s long-wheelbase Caprice is just 13 per cent, reflecting its role as a limo for both commercial chauffeurs and governments.

Top dog for private buyers in Australia is Holden’s Ute, at 42 per cent. And a good many more of those vehicles are no doubt sold as business vehicles to tradies, farmers and the like – effectively private sales. The Toyota Aurion – the reskinned, up-market stretched version of the Camry – is next best, with a 32 per cent private clientele.

Camry Hybrid manages only 22 per cent, with government buyers – particularly the Victorian government – providing a large slice of the sales support for that vehicle, unsurprisingly after investing heavily to woo its production to Australia. That low percentage of private appeal would be a disappointment to Toyota, which had banked on a larger slice of private, green-tinged motorists getting their cheque books out to save money at the bowser.

That buyer split, however, is line-ball with the private uptake of Toyota’s other hybrid car, the Prius – about 24 per cent. And that brings us to overall fleet sales by the big three, including their imports. Toyota is overwhelmingly the biggest supplier of non-private vehicles in Australia – 87,540 in the eight months to the end of August, compared with Holden’s 51,829 and Ford’s 44,197.

However, it is Ford that sells the greatest percentage of its volume to non-private buyers – 68 per cent, compared with Toyota’s 62 per cent and Holden’s 57 per cent. In Toyota’s case, the fleet appeal of its imported vehicles – Corolla, Yaris, RAV4, Tarago, HiLux and LandCruiser, in particular – no doubt raises the non-private element of its sales. Holden turns out to be the closest to achieving a 50/50 split of the overall market, possibly because it has not been pushing fleet sales as hard as the others after suffering a severely dented bottom line in the GFC. It will be interesting to see if that changes once Holden begins local production of its Cruze small car in 2011, with pressure to maximise factory throughput.

So the report really go in depth into user chooser fleets. But these figures, if true, are pretty sad.

[vztrt]

http://www.fordforums.com.au/showthr...03#post3358903

[Brazen]

Originally Posted by dannyhilton

http://www.goauto.com.au/mellor/mell...2577A5000AE348



So the report really go in depth into user chooser fleets. But these figures, if true, are pretty sad.

What is even more disturbing is the fact the ones they do sell are so cheap. I honestly think a modern day XR6 wagon would be one of Falcon biggest sellers. I think sedan-only variants in this market will struggle as time goes by. Cars like Maxima, Accord, Aurion and Falcon will become more and more irrelevant.

Ford has also moved a way from its existing buyer base in designing variants and in its marketing. They really need to admit that the Falcon is the perfect long-distance tourer, family car or tow vehicle. Trying to make the Falcon out to be some 20s-something single male dream car is just not working.

Also the pricing structure is all wrong. A brand new Golf is $25990, a brand new X-trail is $31990. A Falcon XT is $42350, people just cant see the value there. XT permanently at 33990 driveaway and XR6 at 36990 would at least give it some semblance of retail appeal.

Ford also needs to reconsider the design direction of the Falcon, it is WAY too conservative especially on the base models, and the feature content is outdone by Mondeo and in some ways Fiesta.

The low percentage of private sales is just as scary as the low amount of monthly sales themselves.

[vztrt]

Originally Posted by Brazen

The low percentage of private sales is just as scary as the low amount of monthly sales themselves.

Yet MB says that they are selling more to private then before.

[Road_Warrior]

Originally Posted by vztrt

Yet MB says that they are selling more to private then before.

Well it seems that that is either an outright lie or that they used to sell close to 100% of their vehicle stock to fleet buyers.

Its not the first time that Ford's PR fairytales have been debunked - remember they used to tout they had a rich model mix nowadays yet figures posted up a month or two ago demonstrated quite the opposite.

[jpd80]

They're also including all of the user chooser novated leases in the fleet sales data too,
pretty sure if they were counted as private sales, the numbers would be more realistic..

It's not as though fleet sales attract huge discounts these days...

[vztrt]

Originally Posted by Road_Warrior

Well it seems that that is either an outright lie or that they used to sell close to 100% of their vehicle stock to fleet buyers.

Its not the first time that Ford's PR fairytales have been debunked - remember they used to tout they had a rich model mix nowadays yet figures posted up a month or two ago demonstrated quite the opposite.

I would assume the statement would have brought in the Terri (maybe even ute), as that has a better percentage of private sales. Since the Terri there has been a shift from the Falcon...to the demise of the Wagon...which lasted 2 years longer then Ford expected.

[FNQracing]

Originally Posted by Brazen

Ford also needs to reconsider the design direction of the Falcon, it is WAY too conservative especially on the base models

Remember AU? Ford got stung so badly, they are still in the foetal position. Styling of BA and FG suffered as a result, with back to very conservative styling cues.

Trouble is, the Aussie market has changed so much since 1998, and Aussies now have a much more adventurous taste in car styling, and Ford have found themselves behind the eightball again.

[Mr Hardware]

What the 'fleet sales' consideration doesn't take into account all the falcons purchased by private individuals under a company name or novated lease etc. I would hazard a guess that there would be a proportion of new falcon buyers who would be smarter than the average bear and be creative in their payment methods to cut down on tax etc. And good on em!

[Bud Bud]

I think that the biggest concern really is that the ecoboost T4 Falcon is aimed fairly and squarely at the lease and fleet market, to gain what, the last 19% ???. It also shows that the I6 is still holding its own.

Bud Bud

[Mr Hardware]

i don't think the ecoboost motor is there to change the priv/fleet swing, i think it's there to change the market share, ie up!

[Falc'man]

Originally Posted by jpd80

They're also including all of the user chooser novated leases in the fleet sales data too,
pretty sure if they were counted as private sales, the numbers would be more realistic..

It's not as though fleet sales attract huge discounts these days...

Why add sense to this thread?

[Brazen]

Originally Posted by jpd80

It's not as though fleet sales attract huge discounts these days...

Some fleets get massive discounts, rental cars are really bad, little profit and a 6 month turnover which destroys resales values. Guess which car has the highest percentage of rental sales in Australia by far..... Falcon of course. But im sure Ford would spin some BS stating its because rental car companies dont care about price they care about driving enjoyment.

Falcon is one of the best cars on the road hobbled by an atrocious marketing and management team. There is simply no defending 19% private sales with the so little sales it actually gets.

[Cooper69S]

I made a comment in the linked thread http://www.fordforums.com.au/showthr...03#post3358903 that I had meant to make here since it's probably more relevant to this thread...

Originally Posted by Cooper69S

I think few private buyers see the sense in spending $37k on an xr6 that will be worth $27k by this time next year and $22k by the year after. Is there any huge difference between a new car and an 18 month old one? Many of us can probably afford a new one but don't see much sense in losing $15k in depreciation over 2 years (XT would be even worse - probably lose $20k in that time) when a near new car will feel pretty much the same as one bought new after a couple of months of ownership. I bought my BF2 18 months old in perfect condition for $13900. I might consider a new one, but it would only be via a novated lease or some other tax reduction arrangement where I don't wear the full cost of depreciation - I've got better things to do with my money than throw away that much...

I reckon the system works fine at the moment. most new buyers are buying at some sort of significan discount (fleet, lease etc) then the private people buy them for a more reasonable price s/h at 18 months old and everybody wins.

possible exceptions are cars in demand where depreciation is very low and it works out only slightly more to get a new one - eg near new Mazda's - nearly bought a new one a few years ago when s/h units were close to the same price. ended up finding a s/h bargain and went with that...
Falcons and the like will never have that sort of demand since fleets are buying and offloading so many that there are always plenty of near-new ones to choose from at huge price savings over new.

edit: and I didn't necessarily mean that the fleets are getting a big discount in purchase price - maybe they are maybe not, but they have GST savings and tax deductability that many private individuals won't get, which makes the overall cost much higher for a private buyer

[jpd80]

Originally Posted by Brazen

Some fleets get massive discounts, rental cars are really bad, little profit and a 6 month turnover which destroys resales values. Guess which car has the highest percentage of rental sales in Australia by far..... Falcon of course. But im sure Ford would spin some BS stating its because rental car companies dont care about price they care about driving enjoyment.

Falcon is one of the best cars on the road hobbled by an atrocious marketing and management team. There is simply no defending 19% private sales with the so little sales it actually gets.

The days of Holden offering Telstra 40% discount stopped years ago and you would be lucky
to get 20% discount out of Ford these days for large fleet sales. Australia and its fleet sales
are completely different to USA, the fact that rental fleets in Australia want Falcons is testament
to renter preference not discounts on Ford's part.

As said earlier Novated leases make up quite a few sales in small and large fleet orders as the vehicles are treated as fleet for tax purposes. So that 19% figure quoted is quite dubious indeed.

[mik]

a bit better marketing for xt is needed imo, i just had a look at the standard features on the the ford australia site, you could not call it a poverty pak as to many people the xt would seem to indicate, its a pretty well equiped and capable car.

Winner of Best Large Car category in Australia's Best Car awards 2008
Key Features
Five star ANCAP safety rating
4.0L DOHC DI-VCT I6 engine
ZF 6-speed automatic transmission2;
Virtual Pivot Control Link front suspension
Control Blade Independent Rear Suspension (IRS)
16" x 6.5" 5-spoke alloy wheels^
Human Machine Interface (HMI) with monochrome Interior Command Centre
Multi Function Display including distance to empty, average speed, average fuel consumption, speed warning
Bluetooth® mobile phone integration.#2
iPod Integration;+2
Cruise control with steering wheel mounted switches
Single zone automatic climate control
Front and rear power windows
Electrically adjustable side mirrors
4-Way power driver seat
60/40 Split fold-down rear seat back
Standard audio system with monochrome display, AM/FM radio, single slot CD and 4 speakers (total 112 watts)
MP3 CD capability
3.5mm auxiliary audio input jack
Intelligent Safety System incorporating driver, front passenger and side head/thorax airbags1, pyrotechnic seatbelt buckle pretensioners1, crash severity sensor and advanced restraints module
Dynamic Stability Control** incorporating Traction Control and Emergency Brake Assist (EBA)
Driver fatigue warning

[1TUFFUTE]

Originally Posted by Cooper69S

I made a comment in the linked thread http://www.fordforums.com.au/showthr...03#post3358903 that I had meant to make here since it's probably more relevant to this thread...


edit: and I didn't necessarily mean that the fleets are getting a big discount in purchase price - maybe they are maybe not, but they have GST savings and tax deductability that many private individuals won't get, which makes the overall cost much higher for a private buyer

i agree with what you are saying. Also a few years ago the company i was working with was looking at buying over 50 new falcons aus wide and ford wouldnt give them enough deal on the cars from retail or whatever so they went to holden who slashed the prices. hence im sure this is happening to some extent but different buyers situations will bring diff deals.

[Cooper69S]

Originally Posted by mik

a bit better marketing for xt is needed imo, i just had a look at the standard features on the the ford australia site, you could not call it a poverty pak as to many people the xt would seem to indicate, its a pretty well equiped and capable car.

I think the problem with the XT is that it's probably cheaper (maybe a lot cheaper) to own an XR6. Depreciation on GLIs, Fortes, XTs etc has always been pretty savage, but XRs are comparitively good - comes back to the demand factor. That will make a big difference to fleets who are evidently the main buyers. I had a look at carsales.com.au last week to see what prices were like - something like 230 XR6s available in WA and 22 XTs. Why would Ford push a base model when practically everyone is paying a few thousand more on their purchase to buy an XR6 (or G6) with differences that would cost Ford very little extra to produce? The upsell is a Win/Win I reckon

[phillyc]

Originally Posted by jpd80

the fact that rental fleets in Australia want Falcons is testament to renter preference not discounts on Ford's part.

As said earlier Novated leases make up quite a few sales in small and large fleet orders as the vehicles are treated as fleet for tax purposes. So that 19% figure quoted is quite dubious indeed.

My friend hired an FG XR6 when he went to the Gold Coast this time last year. He was amazed at how good it was. "Heaps of space, the thing flew and it wasn't too bad on fuel too!" was his summation of the experience. Sounds pretty positive.

[phillyc]

Originally Posted by dannyhilton

http://www.goauto.com.au/mellor/mell...2577A5000AE348

So the report really go in depth into user chooser fleets. But these figures, if true, are pretty sad.

It would be more complete if they had figures for the Ford Ute as well. I don't believe they would be up there with the GMHolden Ute, but people buy the Ford Ute to do real work.

Then again when you can buy a new SS Ute for $31k as someone had a link to the other day, the private sales are not suprising!

[jpd80]

Originally Posted by Cooper69S

I think the problem with the XT is that it's probably cheaper (maybe a lot cheaper) to own an XR6. Depreciation on GLIs, Fortes, XTs etc has always been pretty savage, but XRs are comparitively good - comes back to the demand factor. That will make a big difference to fleets who are evidently the main buyers. I had a look at carsales.com.au last week to see what prices were like - something like 230 XR6s available in WA and 22 XTs. Why would Ford push a base model when practically everyone is paying a few thousand more on their purchase to buy an XR6 (or G6) with differences that would cost Ford very little extra to produce? The upsell is a Win/Win I reckon

The whole view on base models has changed, Ford feels that it's much better to offer periodically
discounted XR6 and G Series than try to sell the XT as an optioned up but discounted SR or ES pack.

Whilst the current XT is far better optioned base model than ever offered before, it is
now almost relegated to history because no one really wants it any more, its only salvation
would be to rename it as the "E" series and offer the Ecoboost I-4 and DI LPG engines as main features.

[Joe5619]

It does sound like a pretty crap number, but by itself it is hard to tell.. What was the same percentage 1-5-10 years ago & which way is the trend going??

At 19% of 2.500/ per month, Ford are only selling 500-ish falcons to private customers. I wonder if Falcon is Fords number one seller to private customers or if something else in the range has overtaken it??

[Romulus]

Anyone with an ABN will get 'fleet discount' whether or not they are entitled to it.

It's an interesting article. Every vehicle I have bought since 2000 has been purchased in my company name, primarily to get back the GST and claim operating costs/expenses. In fact, I wonder if there is a trend towards business/fleet sales rather than private sales based on the change of tax system since 2000. The last time I incurrered a vehicle expense was in 1999.

[DanielXR8]

Originally Posted by Road_Warrior

Well it seems that that is either an outright lie or that they used to sell close to 100% of their vehicle stock to fleet buyers.

Its not the first time that Ford's PR fairytales have been debunked - remember they used to tout they had a rich model mix nowadays yet figures posted up a month or two ago demonstrated quite the opposite.

They also spun the line for months after the new Mondeo's launch that there was a shortage of Mondeo's. While initially true, this spin went for far longer then any supply issues. There was infact a shortage of customers for Mondeo's. Only recently have the up specced car, word of satisfied Mondeo customers and the dealers getting their head around a car not labelled Falcon in their yard, have they addressed the issue. They still have a car that will never be number one however, because the harsh reality is it has a Ford badge and all the baggage that goes with that brand in Australia.

If anyone on here believes Ford would prefer their current stratergy of selling less cars with higher profits over selling many more, with slightly lower profits. I have a bridge to sell you. That often quoted explanation on these forums holds no water, when looked at who Ford are and what they are in the business to do. They are a mass manufacturer, not a small tuning house in Wales or something.This current stratergy is about survival when you have a smaller customer base who will buy your product.

[Quicksand]

Originally Posted by Joe5619

I wonder if Falcon is Fords number one seller to private customers or if something else in the range has overtaken it??

From the graph in the article, it seems the Territory is the number one private seller for Ford. All the more reason to get it updated properly asap!

[phillyc]

Originally Posted by Inducted_Breeze

From the graph in the article, it seems the Territory is the number one private seller for Ford. All the more reason to get it updated properly asap!

Percentage wise yes. Volume wise is no.

28% of ~1,000/mth Territory is only 280.
19% of ~2,500/mth Falcon is 485.

Fiesta is rocking along with 1,000/mth. I'd imagine plenty are private sales.

[bobthebilda]

Originally Posted by phillyc

Percentage wise yes. Volume wise is no.

28% of ~1,000/mth Territory is only 280.
19% of ~2,500/mth Falcon is 485.

Fiesta is rocking along with 1,000/mth. I'd imagine plenty are private sales.

I'd assume fleet cars would bypass the dealer network completely (or do they physically go thru them for logistics). If that was the case, the dealers would be hard pressed to justify a decent range of australian made floor stock, in order to get the window shoppers remotely interested.

[vztrt]

Originally Posted by DanielXR8

They also spun the line for months after the new Mondeo's launch that there was a shortage of Mondeo's. While initially true, this spin went for far longer then any supply issues. There was infact a shortage of customers for Mondeo's. Only recently have the up specced car, word of satisfied Mondeo customers and the dealers getting their head around a car not labelled Falcon in their yard, have they addressed the issue. They still have a car that will never be number one however, because the harsh reality is it has a Ford badge and all the baggage that goes with that brand in Australia.

So what's Honda's excuse for poor Accord sales??

[Joe5619]

Originally Posted by vztrt

So what's Honda's excuse for poor Accord sales??

It looks crap!!! A brick on wheels..

[vztrt]

Originally Posted by Joe5619

It looks crap!!! A brick on wheels..

But its a Honda, it doesn't have the stigma of the Falcon on it. It was car of the year. Yet it doesn't sell high numbers....oh wait bar the Camry no car in the medium car segemnt sells high numbers.