Ford: Korean Barina 'inferior'
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Sales slide: Holden's Daewoo Kalos-based TK Barina.
Ford says Holden's Korean model strategy overlooks the importance of product appeal
By MARTON PETTENDY
14 March 2008
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NEW Ford Australia president Bill Osborne says GM Holden's Korean sourcing policy has failed because it underestimates the importance of product appeal in the small car market.
Speaking on Thursday (March 13) at his first monthly sales briefing with media, a tradition started by former Ford Oz boss Geoff Polites and continued by his successor Tom Gorman, Mr Osborne said Holden's low-cost light-car strategy had resulted in a Barina that was "inferior" to its predecessors.
"Fiesta continues to be a real strong bright spot for us in the small (light) car segment," he said. "It's clearly a growth segment we believe we have strong product in and can capitalise on.
"The biggest performer was the new Mazda2, but the biggest loser is Barina. We attribute this really to GM's sourcing strategy out of Korea," said Mr Osborne, referring to February sales results, which saw Fiesta's share of the light-car segment rise from 6.0 per cent after the first two months of 2007 to 6.3 per cent to date this year.
Meantime, although it still comfortably outsells the eighth-placed Fiesta, the fifth-placed Barina's share of Australia's smallest vehicle segment has fallen from 13.8 per cent at this time last year to 9.6 percent YTD.
For the record, Toyota's Yaris still leads the light-car brigade, despite falling almost five percentage points in 2008 to 20.5 per cent, followed by Mazda2 (up from 6.0 to 11.8%), Hyundai's Getz (down from 12.8 to 11.2%), Honda's Jazz (up from 10.2 to 10.7%), Barina, Suzuki's Swift (down from 10.8 to 9.3%), Kia's Rio (up from 5.8 to 7.4%), Fiesta, Mitsubishi's Colt (up from 2.5 to 2.8%) and Hyundai's Accent, which has dropped from 4.1 to 0.8 per cent.
Asked to explain why he believed the South Korean origins of Holden's latest baby - the TK Barina-badged version of Daewoo's Kalos that replaced the European-sourced, Opel Corsa-based XC Barina in December 2005, and which is expected to receive a mild facelift this year – had affected its popularity, Mr Osborne said it had been perceived as a retrograde step in the marketplace.
"My assessment is that Barina is just an inferior product to their traditional offering and that's why it's suffering," he said.
"Korean sourcing itself is not the issue. I think it's a question of product appeal and in sourcing that particular product out of Korea they probably underestimated, in my opinion, the value of product appeal in the market in this segment.
"My understanding, from a cursory review of the vehicle, is that it's just not an appealing product, so they may have had a low-cost strategy and underestimated the role that product appeal plays in this segment," he said, echoing comments made by his forebear, Mr Gorman.
Mr Osborne said light and small car buyers now demanded more than just a low entry price.
"The old-school thinking about the small-car segment is that it's purely a price-competitive segment and that's changing as younger buyers expect more and people that perhaps are moving out of larger vehicles are used to all the amenities, if you will, of a larger vehicle. They don't want to give those up as they move into small cars," he said.
"So I think the lesson for us is and the one that we are diligently applying to the small-car segment is that these buyers are not just interested in something that's cheap and cheerful.
"They want all the features, they want modern and progressive styling, in addition to a good value proposition for fuel economy and price of acquisition," he said.
Read more:
First look: Ford flouts new Fiesta
Barina decision looms
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