News - Ford
Asia to grow, Australia to slow
Peaking: Company CEO Bill Ford says Australian sales will plateau.
FoMoCo boss Bill Ford expects Australia's growth to slow as Asia bounds forward
3 November 2005
THE Ford Motor Company believes sales growth in Australia will remain flat through to 2014 but has forecast massive potential for the brand in other parts of the Asia-Pacific region.
Company chairman and chief executive Bill Ford, who was in the region last week to launch the Fiesta in India – a car which Ford Australia had a hand in building – and an ethanol-fuel Focus in Thailand, said Asia-Pacific markets were "critical to our plans for building a Ford Motor Company for the 21st century".
"When we talk about optimising our global footprint, we mean investing in areas that are growing," he said.
He said Ford believed both Europe and Australia would remain static in market expansion terms over the next few years.
However, the Asia-Pacific and Africa regions (excluding Australia) are expected to contribute more than 10.5 million units, or 70 per cent of the total global growth of almost 15 million units by 2014, led by China and Association of South-East Asia Nations (ASEAN) countries.
According to Ford, the Asia-Pacific region is setting the pace for global economic growth, and at its present rate is projected to overtake North America and Europe before 2010.
Ford is profitable in the Asia-Pacific region and, with its recent plant investments in China, initiatives in India and the ongoing Mazda alliance, believes it is well positioned to take advantage of the booming market.
"In this business, to remain competitive we must search for ways to profitably grow our company," said Ford’s president of international operations, Mark Schulz, last week.
"And while growth and profitability in the North American market is important, we recognise there are great opportunities, particularly in Asia-Pacific markets."
China, India and ASEAN countries were priorities, he said. Of the 10.5 million-unit projected growth, these three areas account for about 8.7 million sales.
A Ford Australia spokesperson said there were no plans to introduce either the Indian-built Fiesta or Thai-built Focus – which can run with up to 20 per cent of ethanol fuel in its tank – into Australia.
In recently released third-quarter financial results, Ford Asia-Pacific and Africa operations were two of the shining lights on the Blue Oval’s balance sheet, reporting a pre-tax profit of $US21 million.
Sales were $1.9 billion, unchanged from the third quarter 2004.
Combined with Mazda operations, pre-tax profit for the region was $133 million, $85 million better than the same period in the previous 12 months.
However, the company believes there is room to grow market share.
In 2004, Ford and Mazda had a combined 5.6 per cent market share in Asia-Pacific, which is fifth overall and well behind Toyota (on almost 24 per cent).
The Detroit-based car-maker faces challenges in the region. For one thing, the brand is well-known but market data shows consumers know little of the other Ford brands, which impacts whether they buy, or even consider buying, Ford products.
Another issue is the challenge to expand Ford’s dealer and service centres throughout Asia-Pacific.