VFacts June 2012

[b0son]

Originally Posted by Nikked

they take it that 2016 is the dying breath. All they see is sales numbers and mondeos, not plausable senarios.

what's plausible about falcon continuing beyond 2016? if the rate of decline continues anything like it has over the last 2 years, territory would have to be grow in sales volume significantly to avoid the inevitable.

that factory has huge overheads (as would any car manufacturer). if the Falcon platform doesnt move enough units, either the factory cant turn a profit, or FoA will have to have their own Cruze to justify keeping it open.

[BHDOGS]

The cruise Pfft

[prydey]

Originally Posted by b0son

what's plausible about falcon continuing beyond 2016? if the rate of decline continues anything like it has over the last 2 years, territory would have to be grow in sales volume significantly to avoid the inevitable.

that factory has huge overheads (as would any car manufacturer). if the Falcon platform doesnt move enough units, either the factory cant turn a profit, or FoA will have to have their own Cruze to justify keeping it open.

how many units a month were FoA producing when they announced production until the end of 2016? this is not some 2 bit operation that just decides things on a whim without doing feasability studies and sales projections and all the rest of it. they also answer to a parent company etc etc. if they have worked out that they can continue until at least that time, then what is so hard to understand.

sales are what they are. all local manufacturers know that. none would be so naive to think that sales will suddenly increase and base their projections on anything other than current sales.

given that the suv market is still growing, it is obvious the territory will be the lead singer with falcon the back up. thats nothing more than market forces. there is plenty of life left in FoA yet. they are a very valuable part of the Ford world.

[prydey]

also 3000 cruze's/month @ average $25000 (a guess on my part) v 1800 terri's/month @ $40000 (another guess) = pretty much the same return, so sales volume doesn't automatically mean success.

[jpd80]

And what's worse, slightly more expensive, stable Aussie production versus
low cost thai production exposed to natural disasters killing production for months..

[Dr Smith]

Originally Posted by jpd80

And what's worse, slightly more expensive, stable Aussie production versus
low cost thai production exposed to natural disasters killing production for months..

And the low cost is on labour (approx10-15% of production cost) and maybe some government incentives, all raw material inputs, robotics, etc have to be bought at world prices so the gap cannot be so huge as some make out. Volume is the king here.

[EgoFG]

Originally Posted by prydey

also 3000 cruze's/month @ average $25000 (a guess on my part) v 1800 terri's/month @ $40000 (another guess) = pretty much the same return, so sales volume doesn't automatically mean success.

I reckon that the tez may cost a little more to produce - but your point is perfectly valid.

Sales Volumes do not alone determine profitability.

[Brazen]

Originally Posted by prydey

also 3000 cruze's/month @ average $25000 (a guess on my part) v 1800 terri's/month @ $40000 (another guess) = pretty much the same return, so sales volume doesn't automatically mean success.

Sales volume does equate to success depending on the level of fixed costs you have.

[EgoFG]

Originally Posted by Brazen

Sales volume does equate to success depending on the level of fixed costs you have.

We probably also need to have margin in there too.

... and since we are calling Success the goal, not profitability, there needs to be some concept of "intangibles" - for example sales of a given product could be done at a slight financial loss, if it was good for the brand as a whole.

But given that we cannot actually compare figures that we do not have, let us just beat our chests and strut.

[jpd80]

At the moment building and selling FGII and SZ is more about recovering costs already spent in developing them,
it is more important to keep going than just shutting up shop and walking away from a lot of revenue.
Ford has nothing immediately available to replace either of those two vehicles so the closing down is not an option.

[b0son]

Originally Posted by prydey

if they have worked out that they can continue until at least that time, then what is so hard to understand.

I'm not arguing that Falcon cant continue til 2016. As jpd80 pointed out, they need to recoup development costs. But surviving beyond 2016 almost certainly means some substantial compromises... the Terri will likely become the priority, the Falcon will no longer go toe to toe in terms of development, features etc with Commodore. That said, I'd be very surprised if GMH spend anywhere near what they did on VE.

[jpd80]

Originally Posted by b0son

I'm not arguing that Falcon cant continue til 2016. As jpd80 pointed out, they need to recoup development costs. But surviving beyond 2016 almost certainly means some substantial compromises... the Terri will likely become the priority, the Falcon will no longer go toe to toe in terms of development, features etc with Commodore. That said, I'd be very surprised if GMH spend anywhere near what they did on VE.

Interesting points, VF gives Holden the skin change Commodore desperately needs and you can
almost sense that a lot of the market is staying away until VF, a lot of buyers are on their second VE...
If this is true, Holden can justify more outlay on the grounds of four god years of sales and exports to the US.


Not sure about this but a "friend" has suggested we look at the time frame for FG, it was
introduced at mid 2008 and by mid 2014, it will be six years old or the natural break point...

Is Ford foxing on what they intend doing at that time or have they decided that the one
body shell and door shape can go ten years like AU to BFII......just change nose, tail and interior?

[csv8]

IF Falcon continues until 2016, Ford will have to have a FG3/FG4 or FH...Cann't keep FG2 going until 2016 ?????

[b0son]

It's surely got to go to 2016? It would make zero sense to make a major investment into the platform when the trend is moving toward Terri and away from a sedan. How long is the current Terri expected to go til a major update?

[b0son]

Originally Posted by csv8

IF Falcon continues until 2016, Ford will have to have a FG3/FG4 or FH...Cann't keep FG2 going until 2016 ?????

IMO, an FH with some minor sheet-metal changes (to adopt new front/rear styling), but everything between the A/C pillars to remain unchanged - clear visual differentiation to justify moving on from FG, but with minimal under the skin investment.

[jpd80]

Originally Posted by csv8

IF Falcon continues until 2016, Ford will have to have a FG3/FG4 or FH...Cann't keep FG2 going until 2016 ?????

Timing, Nov 1 2013 is compulsory Euro 5 for new models but existing models get to go through to 1 NOV 2016.
Let's say Ford decides to introduce an FH at late October 2013, that means they can stay Euro 4 until NOV 2016.
If they go FG 3, then they can do the update in 2014 and still go through to NOV 2016..

Depends what's more economical, investing in what could be a fading engine option or
run with new model Euro 4 and introduce new engine or new car in late 2016 and perhaps
leave that decision and (funding request) go for another three years?

I think Ford will take the easy option and delay Euro 5 for as long as possible...

[Bossxr8]

Originally Posted by jpd80

Timing, Nov 1 2013 is compulsory Euro 5 for new models but existing models get to go through to 1 NOV 2016.
Let's say Ford decides to introduce an FH at late October 2013, that means they can stay Euro 4 until NOV 2016.
If they go FG 3, then they can do the update in 2014 and still go through to NOV 2016..

Depends what's more economical, investing in what could be a fading engine option or
run with new model Euro 4 and introduce new engine or new car in late 2016 and perhaps
leave that decision and (funding request) go for another three years?

I think Ford will take the easy option and delay Euro 5 for as long as possible...

The mid cycle update is due in 2014 though, so in theory it will have to be Euro 5. But talk is its pretty easy for them to achieve. Based on what they have said so far the lower friction auto, low rolling resistance tyres and better aero will reduce consumption by 7-8%. I'd assume emissions would decrease by a similar amount?

Would still probably require a re-tune and full certification though, which I don't think is cheap. Or maybe the $100 million odd investment is going towards this?

Euro 6 won't need to be done to a new vehicle until mid 2018. Considering FG ran for 4 years until it copped a new front bar then its possible they could run the mid cycle update through 4 years. They have run other platforms for 10 years I can't see this changing now sales levels have dropped. In a perfect world you wouldn't run it for more than 6 or 7 but they don't have that luxury.

[jpd80]

Originally Posted by Bossxr8

The mid cycle update is due in 2014 though, so in theory it will have to be Euro 5. But talk is its pretty easy for them to achieve. Based on what they have said so far the lower friction auto, low rolling resistance tyres and better aero will reduce consumption by 7-8%. I'd assume emissions would decrease by a similar amount?

Would still probably require a re-tune and full certification though, which I don't think is cheap. Or maybe the $100 million odd investment is going towards this?

Euro 6 won't need to be done to a new vehicle until mid 2018. Considering FG ran for 4 years until it copped a new front bar then its possible they could run the mid cycle update through 4 years. They have run other platforms for 10 years I can't see this changing now sales levels have dropped. In a perfect world you wouldn't run it for more than 6 or 7 but they don't have that luxury.

The emissions levels on Euro 5 aren't the problem, it's guaranteeing the emission compliance for 160,000 km,
that requires different oil (low sulphur) and maintenance schedules on Emission equipment to maintain compliance.
A bit of government money to upgrade will see them right, The I-6 probably wouldn't need much at all..

[csv8]

Thats what annoys me. Why do we have to have the Euro compliance BS ???
Australia doesn't have the traffic of Europe. Another con like the carbon tax...

[jpd80]

Originally Posted by csv8

Thats what annoys me. Why do we have to have the Euro compliance BS ???
Australia doesn't have the traffic of Europe. Another con like the carbon tax...

Asia is pretty much standardised to Euro 4 at the moment, even China.
It isn't that big of a deal anyway, just progressive improvement and let's
not forget the Aussie government paid for most of I-6 Euro 4 anyway..

Up until now, a lot of Ford's energy globally has been on small and mid sized cars,
I think we're not far from hearing some future plan on larger cars, which could have
more to do with large car vehicle development for Brazil-Russia-India-China......

[bobthebilda]

Looks like Holden are starting to panic. A week ago they said

http://www.heraldsun.com.au/news/vic...-1226417217117

There is no panic. We're not going to discount to chase volume," said Holden spokeswoman Emily Perry.

Now Holden are advertising SV6's for $34990 drive away (Holden must be pocketing less $28000 per car). At these prices, Fleets must be getting Omegas very very cheaply.

[XR Martin]

Originally Posted by csv8

Thats what annoys me. Why do we have to have the Euro compliance BS ???
Australia doesn't have the traffic of Europe. Another con like the carbon tax...

No, but we have alot more sun, which when combined with auto emissions (diesel mostly) creates smog.