Cancellation of local Focus, now being regretted?

[Brazen]

Ford thinks EcoBoost will Boost sales, hopefully they are right.

http://smh.drive.com.au/motor-news/i...304-1bh3k.html

Flagging sales have put the locally-produced Falcon on the endangered list

The Ford Falcon is becoming an endangered species. Pressure is mounting on Ford Australia’s local manufacturing operation as the iconic Falcon model continues its sales slide.

The latest car sales figures released yesterday show that Falcon sales have slumped to less than half its arch-rival, the Holden Commodore. Only 1,572 Falcons were sold in February according to the sales numbers released by the Federal Chamber of Automotive Industries (FCAI).

In stark contrast Holden sold 3,829 Commodores, making it the biggest selling car in the country.

The decline raises questions about the viability of Ford’s Australian manufacturing operations. Sales of locally-built Fords have almost halved in the past five years as buyers have flocked to smaller cars, and things have got even worse this year, with sales in the first two months dropping by almost a third.

In contrast, Ford’s smaller Focus and Fiesta cars are selling well. The situation raises questions about Ford’s decision to abandon plans to build the next-generation Focus in Australia.

The car was due to be built at Ford’s Broadmeadows headquarters from later this year, but Ford decided instead to focus on developing a four-cylinder Falcon, dubbed EcoBoost, late this year.

Ford Australia spokesman Neil McDonald tried to put a positive spin on the sales figures.

“Obviously Focus is one of our important new vehicles this year, along with a host of other models in the pipeline - new Territory, Falcon LPi, Falcon EcoBoost and Ranger. Focus arrives in Q3 and it will deliver some high-tech, efficient modern motoring solutions in that competitive small car segment.”

The decision to abandon local Focus production brought into sharper focus this week by Holden’s high-profile launch of its locally made small car, the Cruze.

Holden managing director Mike Devereux said the car was vital for Holden to add more production to its South Australian factory. He believes car makers need to produce at least 100,000 cars locally in order to get economies of scale.

The Cruze currently comfortably outsells the Falcon, despite being imported from Korea.

Currently Ford’s Broadmeadows plant is operating well below its maximum capacity of 120,000 vehicles per year; last year it sold only 50,000 locally made cars in Australia. McDonald says adding the EcoBoost Falcon will entice buyers back to large cars.

“With rising fuel costs consumers are becoming more acutely conscious of fuel economy,” he says. “EcoBoost Falcon will deliver the performance of a six cylinder with the fuel economy of a four, without sacrificing space and creature comforts, which Falcon customers expect and demand of their vehicles.”

Ford secured $42 million from the Green Car Innovation Fund to develop the EcoBoost Falcon and diesel-engined Territory SUV.

But it wasn’t just bad news for Ford and the Falcon. Large car sales are continue to drop as buyers look for smaller, more fuel efficient vehicles. Even the Commodore is down 9.5 per cent year-to-date.

The trend to smaller cars is also putting pressure on the whole local manufacturing industry, that comprises Ford, Holden and Toyota, and is reliant on large and medium cars. The latest figures from the FCAI show that locally made cars are down 21.4 per cent year-to-date, with less than 20,000 sold.

Ford Falcon sales decline

2003 – 73,220

2004 – 65,384

2005 – 53,080

2006 – 42,390

2007 – 33,941

2008 – 31,936

2009 – 31,023

2010 – 29,516

[ZA-289]

I was always told if you cant say anything nice dont say anything at all.....

[HULK EF]

Originally Posted by ZA-289

I was always told if you cant say anything nice dont say anything at all.....

Bunny rabbits /rainbows/ dandelions and happy news doesnt attract attention...
Bad news and dooms day scenario's do.. -as above^

[Quicksand]

Still, they have a point. You can't argue with the numbers.

[Gobes32]

I am sure we would have built Focus if we were given $149 million to do so, but alas.........

[Smoke Pursuit]

Sad isnt it just, but what do they expect.

No Gas, XR8 and wagon... which probably equal 600 - 800 sales plus gas utes a month. Throw that into the mix and thats where Fords lost it...

They still have Territory to cover wagon and im pretty confident they can get them back up to 1200 - 1300 cars per month, but whether they stock enough will be the next drama, they have never ever been able to get stock right...

[The G6ET Spot]

Ford has no one to blame except themselves. Some of the decisions made over the past few years leads me to think that they are in the throws of closing down Broadmeadows and just being an importer.
If that is the way they are thinking then they had better give up now

[PETE_XR6]

I believe the decision to cancel the production of the focus in Australia was made because Ford wants to close Australian operations around 2015-2016

[Smoke Pursuit]

Originally Posted by The G6ET Spot

Ford has no one to blame except themselves. Some of the decisions made over the past few years leads me to think that they are in the throws of closing down Broadmeadows and just being an importer.
If that is the way they are thinking then they had better give up now

Seems that way...

But not a big suprise considering the local manufacturing climate, increased cost of labour and materials not to mention R & D costs just dont make it viable here anymore. Inport duties and other things on over seas cars have made them much cheaper to import and sell. 20 years ago the Falcon was viable, but not anymore.

The unions will have less to complain about soon...

[bobthebilda]

Still, they have a point. You can't argue with the numbers

Deveraux come out last week and said Holden production had to be 105,000 cars a year just to be viable. Ford hasnt given a figure, but with max capacity of 110,000 (as written in article above), then they probably want over 100,000 to be viable also.

Focus production was never going to help Falcon. Even if Falcon again reached 30,000 a year, Territory 15000 and focus was able to double its current sales and reach 2000 per month, it would only add up to about 70,000 a year anyhow. And probably increase the difficulty of the Factory no end.

If the local manufacturers cant make money on a $37000 car, with very little competitors in the large car segment, how are they expected to make money on a $21000 car, littered with competition.

Theres a big difference between wanting to keep local production going, and wanting to run the company as efficiently as possible.

Has something changed in the last 20 years that australian manufacturers have suddenly become competitive with overseas manufacturers (if so, then whats all this big uproar that they can't compete). It doesnt matter if Holden make 2000 cruzes a month, or 4000 cruzes a month, if they are losing $1000 on every car, its just a matter of how big the loss is. Has anyone not noticed that when the cruze was announced, Holden had 3000 employees at its manufacturing operation. With cruze now being made, they now have 2500 employees.

[Silver Ghia]

Originally Posted by The G6ET Spot

Ford has no one to blame except themselves. Some of the decisions made over the past few years leads me to think that they are in the throws of closing down Broadmeadows and just being an importer.
If that is the way they are thinking then they had better give up now

If Ford is intending to just being an importer, I would have thought they would be concentrating now in getting dealerships and aftersales service up to scratch. There doesnt seem to be any evidence of this happening.

Its quite a bit confusing what Ford have in mind, perhaps the rotating CEO door has something to do with it, no-one seems to be at the helm looking for a way forward.

[Smoke Pursuit]

Problem is Australia probably is one of the only countries in the world that doesn't sell cars manufactured here globally on a large scale (VE was and failed). Most other manufacturers sell models globally across different markets. Ford was never setup to be able to export, even if they wanted to with the capacity they have they would have been biting their tails forever.

Ford's done alot of the damage to itself. The V6 program on Falcon would have cost them a lot of money, only to be torn up and forgotten, then we have had the Diesel Territory program which took 2 goes to get over the line. Seriously if the I6 was left alone from the start euro 4 would have happened alot sooner (including gas) and they probably would have had more money for XR8 / G8E.

It just a shame Geoff Polites wasn't here now, they took him away at the worse time then he sadly past on.. He was running the show when things were optimal, BA was starting to beat / match Commodore and customers were flocking to buy cars. Now people just aren't interested, even in cars like the XR6 Turbo, which is an unbelivable car for the money. While the market has eroded some what for aussie sedans / wagons, Holden has proven that they can still sell cars in decent numbers...

[1TUFFUTE]

its depressing that they dont simplifyb things and start from scratch with there thinking.....now what does the buyer want...oh wait good service centers...

perhaps this is what they need to do...they deff have the good products now and coming soon even better. its not the product at all.

[fou_bleu]

As previously stated, Australian factories will never make small cars profitably from now on, so why would FoA be regretting the potential massive loss of money on an Aus. built Focus???

Holden is now in a pickle themselves - they absolutely NEED to sell every single Cruze that they make (and then some) just to break even! This would have been the case if the Focus was to be built here as well.

I also disagree strongly with the statements that FoA has been 'lazy' or behind the 8-ball by not doing TDCi Terry / Euro4 I6 etc. earlier - there's been no money to do that kind of spending until Mr Rudd (or was it JG att?) gave them access to the $230m to do EB I4 & TDCi Terry...

[Smoke Pursuit]

Originally Posted by 4RD4TW

As previously stated, Australian factories will never make small cars profitably from now on, so why would FoA be regretting the potential massive loss of money on an Aus. built Focus???

Holden is now in a pickle themselves - they absolutely NEED to sell every single Cruze that they make (and then some) just to break even! This would have been the case if the Focus was to be built here as well.

I also disagree strongly with the statements that FoA has been 'lazy' or behind the 8-ball by not doing TDCi Terry / Euro4 I6 etc. earlier - there's been no money to do that kind of spending until Mr Rudd (or was it JG att?) gave them access to the $230m to do EB I4 & TDCi Terry...

What about all the money they wasted on the V6 Falcon??

Euro 4 Falcon was not a big cost, they just put it off because they thought the V6 was replacing it, which cost them alot of money...

Territory Diesel was in the pipeline back in 2005 - 2006, but they changed direction and dumped it.

[fou_bleu]

Originally Posted by DASH GT

What about all the money they wasted on the V6 Falcon??

Euro 4 Falcon was not a big cost, they just put it off because they thought the V6 was replacing it, which cost them alot of money...

Territory Diesel was in the pipeline back in 2005 - 2006, but they changed direction and dumped it.

I'm sure there's a sufficient reason why the diesel was canned early on - it was needed from debut and Ford knew it. The 2.7 V6 we are getting was still very young (read: expensive) at the time, so what properly powerful choice did FoA have? Better to loose a few sales than an impossible to regain reputation ;)

As for the V6, that I would say was somewhat an unwanted waste, but the V6 WAS going to be in E8 at that stage, so I'd say it was just a last minute choice to save $$$ in the long term.

A loss today can create to a profit tomorrow...

[Gobes32]

Originally Posted by DASH GT

increased cost of labour

I disagree, we have basically had a wage freeze since 2008.........

[Ringo]

Falcon suffers from a perception of being bad on fuel and poor resale value. This is what makes it less attractive to fleets and thus has hurt its sales majorly.

Not having the gas option is just killing everyone in fleet right now, and we don't even know when it will be available. Gas was 1/3 of Falcon production consistently. There has also been the odd quality issue and dealer issue.

I'm hoping the ecotec 4 cyl Falcon and reintroductio of gas combined with all the other new stuff coming out this year help Ford Aus get back into the ring instead of sitting in the side lines.

[jpd80]

Originally Posted by bobthebilda

Deveraux come out last week and said Holden production had to be 105,000 cars a year just to be viable. Ford hasnt given a figure, but with max capacity of 110,000 (as written in article above), then they probably want over 100,000 to be viable also.

In correct by a long way.

Ford's business plan, manufacturing costs and employee numbers are completely different to Holden
so stop assuming that they are the same.....

A few years back, 40,000/year was considered the minimum number but, since the restructuring of Ford
and last pay off in 2008, I'm lead to believe by those who really know that Falcon production and sales
are still viable at much lower levels (30,000) and that's before we consider Falcon Ute and Territory.

This gabble gabble that Falcon is not viable is your own skewed perception,
would the modern and ruthless Ford motor really keep a loss maker around?

Not on your life, nor would they be spending on future upgrades either.

So relax, take a Valium and calm down, the sky is not falling chicken little...

[Polyal]

This could be seen as being optimistic but.....maybe Ford are not that worried about it...I mean the wagon could have stayed...in general I agree with the axing of the fairlane, I mean even the LWB GMH doesn't sell that much..and the XR8, well, most know I would like to see that back ASAP.

But some of the cars axed could have stayed with a bit more money spent, but Ford didn;t want to flog what development wise was a dead horse, so they concentrate on whats coming up knowing they would cop a hit in sales.

What is lacking here is a competent PR system to sprout all the new things NOW that Ford are bringing out to shut the dooms days journos up..in the short term atleast.

IMO FoA, while probably not jumping through hoops, isn't overly worried at the moment. Wait until the stream of new products come out and then get worried if that bombs.

But yeah, in the mean time some smart PR and sales campaigns are needed, badly.

[DanielXR8]

Originally Posted by DASH GT

Problem is Australia probably is one of the only countries in the world that doesn't sell cars manufactured here globally on a large scale (VE was and failed). Most other manufacturers sell models globally across different markets. Ford was never setup to be able to export, even if they wanted to with the capacity they have they would have been biting their tails forever.

Ford's done alot of the damage to itself. The V6 program on Falcon would have cost them a lot of money, only to be torn up and forgotten, then we have had the Diesel Territory program which took 2 goes to get over the line. Seriously if the I6 was left alone from the start euro 4 would have happened alot sooner (including gas) and they probably would have had more money for XR8 / G8E.

It just a shame Geoff Polites wasn't here now, they took him away at the worse time then he sadly past on.. He was running the show when things were optimal, BA was starting to beat / match Commodore and customers were flocking to buy cars. Now people just aren't interested, even in cars like the XR6 Turbo, which is an unbelivable car for the money. While the market has eroded some what for aussie sedans / wagons, Holden has proven that they can still sell cars in decent numbers...

Although the BA was a revolution in many ways, it also cemented the Falcon as a problem car in the minds of many punters. Ford did a very, very bad job of looking after its customers at that time and many simply traded in their BA's and walked from the brand for good.

I think the FG is still dealing with that fallout.

Dan

[GK]

Originally Posted by Polyal

But yeah, in the mean time some smart PR and sales campaigns are needed, badly.

Absolutely right.

And that's probably cause for concern for all of us. Their PR dept has been pretty woeful for ages, whilst Holden's ability to spin would make Aussies buy almost anything they offer.

They need to make a massive fuss of the diesel Territory and start to leak more news of the EB and LPG Falcons now. They need to build the expectation of great things so that the orders start to flow.

Will it happen. I sure hope so, but as loyal a Ford fan as I am, they sure have a consistently annoying habit of missing opportunities and failing to instill confidence and pride in their products.

We'll see soon enough I guess.

GK

[Bossxr8]

After doing all the figures for the Focus build they came to the conclusion they could never make money on it. To get it to a price point to match its competitors they would have had to remove a lot of the features that will be standard in a Thai built version, making the car uncompetitive.

Does this journo think it would have been a good idea to build it anyway and lose money on everyone they sold.

Moron.

[stevz]

Originally Posted by Bossxr8

After doing all the figures for the Focus build they came to the conclusion they could never make money on it.

So why then was it decided on in the first place? Surely they would have done all the figures before the original announcement was made?

[Polyal]

I reckon half of it was just to combat the Cruze publicity....

Ford diversifying and improving the falcon is a better long term plan IMO. If they can sort the consumption within reason and market the bejesus out of it then it should be more profitable...profit being the aim of the game and all.

[jpd80]

Originally Posted by Bossxr8

After doing all the figures for the Focus build they came to the conclusion they could never make money on it. To get it to a price point to match its competitors they would have had to remove a lot of the features that will be standard in a Thai built version, making the car uncompetitive.

Does this journo think it would have been a good idea to build it anyway and lose money on everyone they sold.

Moron.

The world is a different place to 2006 when Gorman was looking at Volume to justify Broadmeadows,
Ford wants to make a profit off every car it sells and Burela decided to make changes to allow the
production of Falcon to become more efficient by streamlined manufacturing costs at every opportunity.

Had FoA not done that, their costs may have been higher than Holden's two shift wonderland.

[Bossxr8]

Originally Posted by stevz

So why then was it decided on in the first place? Surely they would have done all the figures before the original announcement was made?

They made the original announcement at the same time as they announced the plan for a V6 Falcon, obviously to divert some of the heat away from that. They probably did some quick number crunching and it would have seemed do-able.

But obviously once they had done a total cost analysis they figured out it wasn't. It must have been an extremely detailed one too as it took them over a year to do it, so it must have been a case of making an announcement when they really weren't in a good position to do it as a way of saving face when the plan to kill I6 was made.

In hindsight it was the wrong thing for them to do. But if they didn't announce the plan to kill I6 we may never have known about them trying to get Focus production, cause usually those sorts of plans are kept secret so far out from its release. It was 2007. They would not have announced it until after the final decision was made and it was do-able.

Toyota did a cost analysis on Corolla production at Altona and they con't get it to work either. Still don't know how Holden can get Cruze to work.

[fou_bleu]

Originally Posted by Bossxr8

Still don't know how Holden can get Cruze to work.

I don't think it will work all that well myself - it's only been put on because a) it's good PR (making jobs) and b) so the workers can go back to weekly rosters and 'improve the economy'... but alas, they'll loose on every car as it is surely impossible to make money on 2500 sales / month out of the 3000 they'll make! /facepalm

[big_landau]

ford australia is in total disarray,i just hope the falcon dosnt go the way of the valiant,another great australian car gone down in history.

[b0son]

Originally Posted by DASH GT

Problem is Australia probably is one of the only countries in the world that doesn't sell cars manufactured here globally on a large scale

And they never will, while they have a head office that ultimately determines whether they are given that opportunity.

If Ford/GMH were truly independent and free to export without it stepping on parent company's toes, they probably would.