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Brand building the key for Ford

Private wealth: In its previous generation, Ford's Mondeo found plenty of of fleet buyers, but the company is hoping to appeal more to private buyers with the new version (left) launched in April.

Higher pricing and more spec will lift brand appeal in Aus: Ford


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11 Aug 2015

FORD Australia is committed to turning around its brand perception Down Under by offering more desirable, highly specified models and says it will resist entering a retail price war with its competitors to increase volume.

While much has been made of Ford's sliding sales in recent years, the company has publicly stated that it will no longer chase volume as it has previously done, and will instead concentrate on shifting its brand perception from the 'Falcon company' to a more attractive global brand.

Ford Australia communications and public affairs director Wes Sherwood told GoAuto at the recent Everest media launch in Thailand, that the shift from manufacturing to importing cars will ultimately benefit the company's change in strategy to appeal to private rather than fleet buyers.

“We are not going to be one of the volume chasers any more,” he said. “We are going to build value in, we are going to invest in the product more than we have before – you mentioned value – that’s what we are focusing on. Building vehicles with features that people want.

“Instead of saying 'well we need to design something that can sell this many vehicles from this plant to keep it running'. We used to have a manufacturing strategy and now we have a consumer strategy.”

Mr Sherwood highlighted the recent repositioning of the facelifted Focus range, which saw the company drop the base Ambiente variant, which starts from $20,290 plus on-road costs, leaving the formally mid-spec Trend as the new entry model, priced from $23,390, a higher starting price than all of its rivals.

“Here in Australia, we dropped the entry Focus. That’s a pretty big volume and that’s the volume part of the market. But it's also where all the price point operators are at who are just trying to get every last sale by having the most attractive cheap price.

“We are not going to do what we did before. We won't say 'we want to be top seller and we will do anything to get there'. It’s refreshing in a way. It looks different from the outside, we understand that.”

Mr Sherwood said Ford Australia executives do not “sit there an obsess” about sales numbers, and while he acknowledged that there was some pressure to improve sales, added that tough decisions were necessary to improve the standing of the brand in the eyes of consumers.

“Obviously there is a lot of pressure to do better in sales. We are not going to deny that, but we have taken some hard decisions…“(Keeping the base Focus Ambiente) could make our sales look better but it just wasn’t good business. It didn’t make sense for our customers, it didn’t make sense for where we are trying to go as a company. If you can do that in Australia, in the most competitive market, with the most brands… it’s hard.

When asked if Ford will hit 70,000 sales in Australia this year – which will mark the company's lowest sales in more than half a century – Mr Sherwood declined to discuss specific targets, but added that a return to the sales glory days was unlikely.

“We certainly have targets, we don’t go out and beat our chest about it. If it means we have to sell a bunch of rental cars in December to get that, we are not going to do that. When you start going out with numbers publicly, it forces you to move away from your strategy.

“But we are not going to go out and say something silly, because at the end of the day we are going to focus on private retail buyers and build the vehicles and offer the vehicles that we think will attract them.

After being the third top-selling brand in Australia behind fellow local car-makers Toyota and Holden for years, it was usurped by Hyundai in 2012, the Blue Oval is now sitting on 40,557 sales so far this year, placing sixth behind Toyota (118,554), Mazda (65,947), Holden (59,632), Hyundai (58,610), and Mitsubishi (41,055).

If Ford hits 70,000 sales by year's end, which it is on track to do, it will be about half the volume it achieved just over a decade ago in 2004 when it shifted 135,172 units and held a 14.2 per cent market share.

Mr Sherwood said adding value into the various models with generous specification levels and offering a greater customer experience were keys to the brand's rejuvenation in Australia.

“Obviously we have targets, we have to run the business that way… but we are not going to change the way we go to market. We used to drive a lot of our sales by manufacturing. We are now trying to reverse that.

“We are going to create the right sales mix and that ultimately creates value for customers. You have a brand that has more value, it creates higher residuals because people are paying their hard earned money for the vehicles as opposed to the most discounted.

“If you look at things like the free loan car program, that’s the kind of value we are adding in. Obviously it costs more, but if you are trying to add value for your customers, there are the things you need to look at.

“If you are looking for us to go to 10 per cent next year, people will be disappointed. But that’s not our ultimate goal.”

The American-owned car-maker will close its Victorian manufacturing operations in October 2016 after 90 years of building cars in Australia, and will become a full-line importer offering a more diverse model line-up than in the recent past.

Mr Sherwood highlighted a number of new or upcoming models that will provide incremental volume for the brand, such as the Australian developed Everest SUV and the Mustang sportscar, but suggested the Mondeo mid-sizer could attract more private buyers in its latest iteration than it had previously.

“Mondeo is a real interesting case,” he said “People say there is an opportunity to grow sales. If you look at what the Mondeo business was, it was all fleet, we were not attracting retail customers. So it's not a volume opportunity in our mind, it's let's shift the model to be a retail customer-driven business. In that case that’s not really an incremental opportunity, as it is let's make the business right, whereas Everest and Mustang are incremental.”

Mr Sherwood said Ford's brand perception will have improved by the end of this decade, with a focus on new product and highlighting areas such as the company's Australian engineering and design connection.

“After we move through this transitional period, it's going to become very clear and we are going to force the message a bit more about how we are just unique in the market and we have the biggest presence and we are still the home team. We are the biggest auto-maker in terms of employment once the manufacturing ends.”

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