Should Ford build a third vehicle in Australia?

[Ducati888]

Originally Posted by Road_Warrior

The danger there is that your business case is reliant on exports and when exposed to fickle exchange rates and global economic problems, it can make that ongoing business case rather precarious - just ask Holden how their exports went during the GFC.

The third vehicle line could be a niche product for domestic consumption only, but it would need to be something people actually want, as opposed to Ford telling people what they think they want. Something like the Kuga, or maybe even the T6 SUV?

Everybody is at the whim of changing exchange rates, not just Australia. Exports globally would have slowed down during and after the GFC. GM US wnet bust on domestic market alone. The business needs to be viable for many reasons, but exchange rate is a cop out excuse businesses spin.

Ford need to build a smaller AWD wagon in Australia, for domestic use and export, the size of a RAV 4 and market it as well as Holden did with the Cruze.

[Road_Warrior]

Originally Posted by dimka100

It’s interesting that most people are asking for additional manufacturing in Australia, however most forget that business wise it’s the last thing any company will try to do these days:

As per another thread that’s already running on this forum, manufacturing in Australia is simply not viable any more – unless its government subsidised:

1. We have a very expensive workforce here
2. We have very high company taxes
3. We have far more OH&S laws, fair workplace laws, unions governance that any developing country
4. We are very far away while our local market is tiny

All these issues make manufacturing in Australia astronomically more expensive than say countries like China or India or many other developing countries of this world …

We do however have one strength over many developing countries and that is engineers and experience in designing things … that is exactly what every manufacturer out there needs to take advantage of … Hence for companies like Ford, the best business case is to outsource manufacturing lines to developing countries (China, India, Thailand …) while reinvesting the savings gained into more engineering/design/development/testing activities in Australia. This in return will make cars like the Falcon a lot cheaper to build, while the savings could be reinvested into development to keep improving the product in order to keep up with the rest of the worlds manufacturers …

I know that a lot of people get sad when they see labour jobs slowly diapering from this country … but the reality is such and its only a matter of time before it happens in every industry … people they need to adapt and start getting a higher education so they can remain competitive against the much much cheaper workforce of the developing countries … our government can only keep subsidising so much, and even the labour government is slowly starting to realise it’s not a sustainable way of going about things.

It would depend on the product being manufactured. For example, a Fiesta or Focus type car is not viable to be built here, Ford have said so in their reasons for not proceeding with the Focus production, and this was backed by Toyota who said they couldnt understand how Holden will make money from local Cruze production. The segment is such a cut-throat segment to compete in (with over 20 competitors) and slim profit margins, henceforth offshore manufacturing in low cost countries makes sense. Little wonder people are flocking to C-segment cars with the discouting and amount of choice prevalent in this segment.

Compared with say, compact SUVs, there are 4 or 5 competitors and handsome profits to be had from private buyers who are flocking to the segment in droves. It could be sustainably built here using a combination of locally made and imported parts, and Ford would still make a profit out of it.

The Ranger could be too, but less so in terms of profits as it would attract the interest of large industrial and mining fleets who would demand hefty discounts if Ford wanted their business.

[mik]

it`s a tuff call, if i`m not mistaken Ford oz has a reduced work force to keep costs down, i`m thinking better to concentrate on making one platform(or two) really really good, instead of spreading already thin labour resources to make 3 mediocre platforms.

[Gobes32]

Ranger still gets my vote, the dual cab segment is a huge market these days.

[dimka100]

German manufacturers have been outsourcing manufacturing offshore for ages now, in fact most German manufacturers are only trying to built their most expensive/specialised models in Germany, while the rest of the normal stock gets manufactured overseas.

Japan is a very different case, firstly workers there are much cheaper as their work ethics are far different to Australia (they are very very hard working where 10 – 12 hours a day is average) … secondly they have a huge local market that constantly refreshes cars as the government had made sure that people cannot drive old bombs on the street unlike Australia … but at the end they too started to outsource a lot, just look at Honda.

Originally Posted by Brazen

Japan and Germany have much more expensive workforce and more laws/regulations, and they are some of the biggest producers of cars in the world. Also our distance and unique regional tastes can also work at a disadvantage for imports.

Really the biggest killer is our currency, this will change over time. Westpac see the intinsic value of the dollar in the 80s US cents region.

I think sometimes the problem is that because Australia isnt producting cars we want, we automatically assume we cant compete. We can compete, just need to build things that the market wants to buy.

[mik]

that might explain why some have posted that some benz models lack the qaulity of older models?

[Bossxr8]

Originally Posted by Brazen

Interesting Holden research on locally built cars:

http://www.caradvice.com.au/144771/h...-hatch-review/



I also think Ranger would be a good locally built option. Imagine all the government, fleets, mining companies, grey nomads builders and tradies having the choice between an Aussie designed and built 4wd ute or something made in Thailand. Goodnight Hilux, Colorado, Triton and Navara. I think locally built Ranger could be one of the biggest selling vehicles in the country.

I wonder how many people they asked said the Cruze was built in Australia, cause aren't all Holdens built here. Most people would assume that because it has a Holden badge it must be Australian made. And you also have to remember people who buy Holdens aren't the brightest people either.

[jpd80]

Originally Posted by Road_Warrior

It would depend on the product being manufactured. For example, a Fiesta or Focus type car is not viable to be built here, Ford have said so in their reasons for not proceeding with the Focus production, and this was backed by Toyota who said they couldnt understand how Holden will make money from local Cruze production. The segment is such a cut-throat segment to compete in (with over 20 competitors) and slim profit margins, henceforth offshore manufacturing in low cost countries makes sense. Little wonder people are flocking to C-segment cars with the discouting and amount of choice prevalent in this segment.

That assumption was based on a product mix of roughly 65% base model and 35% mid/high series.
The biggest kick in the guts was LV Focus launch when Ford tried that product mix, guess what?
No one much wanted the LX, everyone wanted Zetec and Ghia resulting in instant 4 month waiting list,
all still with a paddock of LXs that had to be discounted to shift....
Strangely, Ford repeated the product miss match again with current Focus and ordered too many Ambiente...
There is an astounding premise that Holden cannot be making money out of Cruze production but, look at the mix
and you'll see Holden is selling a lot of mid and high series Cruzes that are adding a lot to average transaction prices.

IMO, Ford didn't miss the boat putting focus production in Thailand, that was prudent but what they didn't do
was call for an appropriate product like Mondeo hatch and Station wagon, especially if replacing falcon S/W...

Compared with say, compact SUVs, there are 4 or 5 competitors and handsome profits to be had from private buyers who are flocking to the segment in droves. It could be sustainably built here using a combination of locally made and imported parts, and Ford would still make a profit out of it.

Escape or next Edge would work OK but a lot of purchasing power could be had by producing Mondeo locally
especially for government fleets where diesels and Ecoboost would surely unseat Camry petrol and hybrid.

The Ranger could be too, but less so in terms of profits as it would attract the interest of large industrial and mining fleets who would demand hefty discounts if Ford wanted their business.

Try Ranger SUV... Everest.
Now that would be worth making and selling here to put against Prado
Especially if it has either I-5 diesel or Territory's V6 diesel for smoothness..

[Road_Warrior]

Originally Posted by jpd80

That assumption was based on a product mix of roughly 65% base model and 35% mid/high series.
The biggest kick in the guts was LV Focus launch when Ford tried that product mix, guess what?
No one much wanted the LX, everyone wanted Zetec and Ghia resulting in instant 4 month waiting list,
all still with a paddock of LXs that had to be discounted to shift....
Strangely, Ford repeated the product miss match again with current Focus and ordered too many Ambiente...
There is an astounding premise that Holden cannot be making money out of Cruze production but, look at the mix
and you'll see Holden is selling a lot of mid and high series Cruzes that are adding a lot to average transaction prices.

IMO, Ford didn't miss the boat putting focus production in Thailand, that was prudent but what they didn't do
was call for an appropriate product like Mondeo hatch and Station wagon, especially if replacing falcon S/W...

Escape or next Edge would work OK but a lot of purchasing power could be had by producing Mondeo locally
especially for government fleets where diesels and Ecoboost would surely unseat Camry petrol and hybrid.

Try Ranger SUV... Everest.
Now that would be worth making and selling here to put against Prado
Especially if it has either I-5 diesel or Territory's V6 diesel for smoothness..

Ecoboost is going to be covered though with the Falcon and don't forget there is still the diesel option for it, even though Ford still won't touch it (diesel in a Falcon).

Here's a left field idea for you: how about Ford making the Kuga at Broadmeadows, and purchase Tonsley Park to make T6 SUV and dual cab ute?

[warpsp33d]

They should add Focus production to Australia, in the least so they can swap the frigging indicator stalk to the correct side of the steering wheel. It's border line criminal that car companies are able to be so lax with that.

Hopefully when production shifts to Thailand they'll swap it for production there, given that export from there is likely to be to many countries that drive on the left side of the road: Australia, Hong Kong, Singapore, New Zealand, Bangladesh, India, Pakistan, Sri Lanka, Malaysia, South Africa, Thailand, Indonesia, Bhutan, Nepal, East Timor and Japan.

[dimka100]

ofcs German made will always be better than German designed but made in say South Africa ...

But ultimately consumers who buy lesser models want price first, rest later ... for those who want the best they get the M or AMG cars and these are made in Germany ... rest settle for the badge

With Ford but I don't think outsourcing will reduce the quality of the vehicles as its not that high to start with

Originally Posted by mik

that might explain why some have posted that some benz models lack the qaulity of older models?

[dave351cid]

i would like to see the ranger built here. and /or the upcoming wagon version.

the ranger is already a strong seller with fleet buyers and if it was built local that would maybe give it another edge over the competition. i had a look at the new ranger at the dealers on the weekend, very nice. i could be tempted into one if they were built local.

rhd mustang based on falcon floor pan and running gear would be another good option. dont expect to see that happen though.

[Road_Warrior]

Originally Posted by dave351cid

rhd mustang based on falcon floor pan and running gear would be another good option. dont expect to see that happen though.

Really???

[aussie muscle]

Originally Posted by Linkachu

Mustang at a decent price would be sick.

it's weird they've never tried selling mustang at a decent price here (i wont pay $120,000 for one).

[EgoFG]

The two most successful sedan based coupes in Australia, adjusted for year are ....

And were actually cheaper than the four door variants.
And were available pretty much model for model across the range.

[fou_bleu]

Ford are still trying to figure out what will happen past 2015 with the next large sedan, let alone another car to be built here (which would tank IMO)...

[Brazen]

Holden should also consider building a SUV off the Cruze platform.

[jpd80]

Originally Posted by Brazen

Holden should also consider building a SUV off the Cruze platform.

Chevrolet Orlando...

[Road_Warrior]

Originally Posted by Brazen

Holden should also consider building a SUV off the Cruze platform.

And this has everything to do with Ford how..?

[jpd80]

Originally Posted by 4RD4TW

Ford are still trying to figure out what will happen past 2015 with the next large sedan, let alone another car to be built here (which would tank IMO)...

So you think all of the following would fail:
1) Escape/Kuga
2) Everest- Ranger SUV
3) Mondeo 5-door hatch and Wagon.

IMO, Broadmeadows needs to build at least one vehicle on a global platform in addition to local vehicles.

[Brazen]

Originally Posted by jpd80

So you think all of the following would fail:
1) Escape/Kuga
2) Everest- Ranger SUV
3) Mondeo 5-door hatch and Wagon.

IMO, Broadmeadows needs to build at least one vehicle on a global platform in addition to local vehicles.

I think Mondeo is too close to size to Falcon. The others sound good.

[fou_bleu]

Originally Posted by jpd80

So you think all of the following would fail:
1) Escape/Kuga
2) Everest- Ranger SUV
3) Mondeo 5-door hatch and Wagon.

IMO, Broadmeadows needs to build at least one vehicle on a global platform in addition to local vehicles.

Considering that the Focus already costs around a whopping $30k for the Trend hatch (mid-range with the Sport), imagine how much more the same model would cost if it were made here with the cost of retooling and what not needed to be covered?! Sure more jobs would be made, but I'd be surprised if Ford broke even on the project in the next 10 years considering how much cheaper the Golf, Cruze and 3 would be and the loss of market share over the price hikes.

I honestly believe that making cars here for the sake of saying Australian made isn't a wise move if it sends you broke, but depending on what happens with the next Falcon / large car and a global platform, there might be the need to add more volume to the plants to justify keeping Broadmeadows open, but not with the E8 and Territory IMO - their costing FoA enough as it is...

[jpd80]

Originally Posted by 4RD4TW

Considering that the Focus already costs around a whopping $30k for the Trend hatch (mid-range with the Sport), imagine how much more the same model would cost if it were made here with the cost of retooling and what not needed to be covered?!

Sure more jobs would be made, but I'd be surprised if Ford broke even on the project in the next 10 years considering how much cheaper the Golf, Cruze and 3 would be and the loss of market share over the price hikes.


I honestly believe that making cars here for the sake of saying Australian made isn't a wise move if it sends you broke, but depending on what happens with the next Falcon / large car and a global platform, there might be the need to add more volume to the plants to justify keeping Broadmeadows open, but not with the E8 and Territory IMO - their costing FoA enough as it is...

Huh?

In the first instance,

Labor component of cars is roughly 10% of build cost (not retail price)
so cost of labor between Australia and Thailand as a portion of vehicles costs
isn't as high as some would imagined, there is more profit in building in Thailand
but building in Austraila would put Ford at the front of the queue with govco sales...

And Secondly,

Ambiente is $20,990 drive away, Trend Hatch at around $30K.
the latter has a healthy profit margin for Ford.

Considering my earlier statement that Ford's original business plan was flawed as follows:
- 65% Ambiente @ $20,990 drive away
- 35% Trend and Titanium @ + $30,000 drive away

Since LV Focus launch a few years ago, sales trends suggests that those percentages are
completely opposite but Burela wasn't willing to take the chance so bailed of Focus deal.
That product mix is also why Holden is going gang busters with Cruze and also why FoA kinda missed the boat......

[Road_Warrior]

Originally Posted by jpd80

Since LV Focus launch a few years ago, sales trends suggests that those percentages are completely opposite but Burela wasn't willing to take the chance so bailed of Focus deal.
That product mix is also why Holden is going gang busters with Cruze and also why FoA kinda missed the boat......

The thing is though it is still competing in a tough segment with over 20 competitors and has profit margins to match.

[Brazen]

Originally Posted by Road_Warrior

The thing is though it is still competing in a tough segment with over 20 competitors and has profit margins to match.

Out of the top 10 selling cars in the country, 5 are small cars. They could have 1000 competitors but if they are all selling big volumes, everone is laughing.

Seeing the high proportion of fleet and 'pump and dump' rental buyers for Falcon. Seeing the sales falling off a cliff for large cars, then looking at the massive amount of private buyers in the small segment....

.....I reckon the large car market is far tougher.

[jpd80]

Originally Posted by Road_Warrior

The thing is though it is still competing in a tough segment with over 20 competitors and has profit margins to match.

What is so tough for Ford is having decent supplies of the right products in for buyers to purchase immediately
That is the real killer for Ford and something they freely admit but seem powerless to correct without local assembly..

[THE SLUG]

I vote for a RHD Mustang. They've got the Territory and Falcon, why not a sporty 2 door? I think it would be awesome, and I reckon there's plenty of people out there who'd love a Mustang!

[flappist]

Ford Australia might like to build an "Urban Eco" car.

Take a Focus Hatch size chassis, fit a hybrid engine with small ecoLpi 3-4 cyl engine on the fuel part and give it a 500km combined range with the lowest running cost in the country.

Make it in pretty colours with matching accessories from boutiques and employ someone like Alex Perry to market it to the city metrosexual latte crowd as "simply ecofabulous".....

[Bossxr8]

Holden have the metrosexual latte crowd sown up with the Commodore ute.

[Brazen]

Originally Posted by flappist

Ford Australia might like to build an "Urban Eco" car.

Take a Focus Hatch size chassis, fit a hybrid engine with small ecoLpi 3-4 cyl engine on the fuel part and give it a 500km combined range with the lowest running cost in the country.

Make it in pretty colours with matching accessories from boutiques and employ someone like Alex Perry to market it to the city metrosexual latte crowd as "simply ecofabulous".....

Wouldnt be so crazy if the federal government coughs up some dough. Look at the dutch with building electric cars now because of their government, and they have very very little of the supplier or engineering base that Australia has.