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Ford  Great expectations: Ford Australia is looking for a big sales boost with the AUII Falcon.

Great expectations: Ford Australia is looking for a big sales boost with the AUII Falcon.

Ford Australia has increased profit but is still a long way from a satisfying result

THE AU Falcon may not have been the sales success Ford Australia had hoped last year, but it still sold more than the previous year and pushed the company to an increased profit result for the year ended December 31, 1999.

Company president Mr Geoff Polites today (Wednesday, April 19) announced a net profit of $82.3 million, an increase of 41.9 per cent over the $58 million posted in 1998.

But Ford is still a long way from its average $186 million profit for the previous four years.

Mr Polites said he was not satisfied with the result, which needed to be higher to justify the company's investment in Australia.

"We'll be looking for further earnings growth to justify the substantial investment we plan over the next five years to bring this market new products that will maximise customer value and satisfaction," he said.

"The 1999 profit improvement primarily reflects a full year sales impact of the new AU Falcon range and continued efficiencies providing cost reductions at Ford and our suppliers."

Although Falcon sales increased by 5900 units to 85,700 in a reduced market, Mr Polites was disappointed that the AU was unable to topple the dominant Holden VT Commodore at any stage last year.

Ford Australia is expecting a much improved performance in 2000 thanks to the AUII facelift, which was rushed onto the market to overcome buyer indifference.

But Mr Polites said he was concerned that the big fleet buyers would hold out until the GST arrives on July 1 - when the price of a Falcon Forte would drop about 6 per cent ($2000).

The company has no intention of following the lead of some luxury car importers by dropping prices to post-GST levels in the meantime, saying it would cost Ford $10 million a month.

"The new Falcon attracted a lot of public interest at the Melbourne motor show in March and we are particularly encouraged by the initial reactions of business fleet customers and the positive reviews the car has received from the automotive media," Mr Polites said.

"We are confident we have made the right changes to the Falcon to make it more attractive to our customers and more competitive in the marketplace.

"While it is still difficult to predict the market for the balance of the year, we are expecting to improve our performance overall, lift Falcon share and make significant gains in profitability."

Although Falcon sales increased last year, Ford Australia sold 1900 fewer vehicles overall last year, continuing a downward trend since 1995.

Poor performances by Mondeo, Festiva, Laser and Explorer cost the company while its best performers were Fairlane, Falcon and Falcon Ute.

Ford niche product entries started slowly with Ka registering just 376 sales and Cougar 165 - less than half what the company had anticipated.



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