News - Ford
We've been too conservative - Ford
Substitutional: Ford admits softer Falcon sales are due to Territory's success.
Focus is back on Falcon as Ford boss vows to arrest decline - and Holden's VE
31 August 2005
WILL Ford Australia's forthcoming BF Falcon, with its revised engines and six-speed automatic transmission, be enough to hold off the onslaught from Holden's new-generation VE Commodore?
Ford Australia president Tom Gorman thinks so.
The Blue Oval brand's large sedan has slumped 20 per cent this year - it is down 7800 sales year-to-date, due in part to the all-conquering Territory - however Mr Gorman said the BF Falcon had the goods to keep customers coming back
for more until an all-new model arrives in 2007.
Its direct rival, the VE Commodore, arrives mid-2006.
Mr Gorman has admitted to GoAuto that the shift from large sedans to 4WDs had "been a challenge for us".
"Some of that is that we have clearly decided that we didn't want to throw as much money at the marketplace as some of our competitors have, and we've tried to stay out of that battle a little bit, and perhaps we've been a little too conservative," he said.
He said "tactical actions" designed to refocus on the Falcon, through sales and marketing activities and at a dealer level, would be instituted later this year "which I think we'll be successful with".
Mr Gorman was confident the mechanical revisions to the Falcon and the SY Territory series, delivered under the codename "copperhead", would generate enough interest among consumers to sustain the brand.
The fact that the new ZF six-speed automatic will be limited to top-end models also means Ford has an ace up its sleeve - perhaps introducing it to lower-series cars - when the VE Commodore arrives.
Yet Mr Gorman admitted that although the Territory was a runaway success, Ford would have to modulate its marketing efforts to "make sure we're not forgetting about the Falcon".
He said people had "substituted" from Falcon into Territory but that this had
not stolen sales from the brand because the Territory acted as a strong incentive to prevent consumers defecting to another marque.
Ford Australia's overall sales have softened just 0.6 per cent this year YTD, but it is Falcon that has executives worried.
Conversely, Territory sales have gone from strength to strength.
It enjoys a 15.3 per cent share of the total SUV segment and exports to South Africa and New Zealand have taken off.
More than 28,000 have been sold in Australia since its launch and, according to Mr Gorman, the order bank is rich with high-end Ghia models.
He also insisted that the large-car segment still constituted an important piece of the overall market, despite a shift in consumer preferences.
"Falcon and Commodore make up essentially 80 per cent of that segment size," Mr Gorman said. "Back in 1996, it was 30 per cent of the marketplace. In a 600,000 industry, it was about 180,000 pieces.
"This year in year-to-date terms it is running at 16 per cent of say a million-unit industry - about 160,000 pieces.
"So even though the demand is very large it's one of the top four segments - it is, in fact, the fourth-largest segment on a year-to-date basis."
From a high in 1996 of 30.6 per cent, the large car segment has shrunk to just 19 per cent last year, according to Ford Australia's own figures.
So far this year the large-car segment has accounted for 16.1 per cent of the total market.
Mr Gorman attributed the shift partly to a change in buyer habits, which has been accelerated in recent months as consumers switch to smaller, more fuel-efficient cars because of rising fuel prices.