News - Ford
Ford Australia posts $191m loss
Dwindling sales, escalating wind-down and redundancy costs hit Ford profits hard
26 May 2015
SLIPPING sales and mounting exit costs continue to impact Ford Australia's finances, with the company posting a $190.7 million loss for the 2014 financial year.
With 79,703 vehicles sold last year, Ford's annual total has slumped to a 48-year low, adversely impacting the company's profits, but costly preparations for the cessation of local manufacturing next year have also had a marked effect.
The latest figure takes Ford's total loss in the last decade to a substantial $1.3 billion, but the company points out that the 2014 result is a step in the right direction and $76m better off than the previous year's loss of nearly $267m.
Ford Motor Company of Australia communications and public affairs director Wes Sherwood told GoAuto the most recent figures mark a reduction in operating losses, adding that better times were ahead for the American car-maker.
“We think a key is that these results show our long-term business is strengthening as our operating results improved nearly $3 million (the loss was reduced from $26 to about $23 million) based on a better mix of sales,” he said.
“We have been emphasising during monthly sales reports as our business is getting better even as sales have declined. In fact, we only have about five per cent of the rental car business we had just a few years ago.
“This is the same One Ford strategy that has been working for us around the world, and something we are committed to for the long run.”
Whether the smaller loss indicates a turnaround in profits remains to be seen, but the company will be planning to reverse trends in October 2016 when it becomes a full-line importer.
The date will mark the end of its iconic Falcon large sedan, sales of which have slipped dramatically in recent years, despite a recent facelift and better sales performance from its XR8 flagship.
Earlier this year, the vehicle that was once Australia's favourite car had slumped to 53rd place in the new car sales rankings and continues to slide into obscurity.
April sales this year were down almost 20 per cent compared with the same month in 2014 with 5163 registrations versus the 6449 moved in April the previous year.
In recent years the Australian government has contributed $1.1 billion of financial assistance to the company, but Ford says a portion of that cash was ploughed into the local design and development centres that will live on after production stops.
With the survival of its development facilities, the company is painting a rosy picture of the future, and still has grand plans to become Australia's largest automotive employer by the time all local manufacturers – including Toyota and Holden – close their operations by late 2017.
In addition to the optimistic employment predictions, the company is also planning to transform its sales performance, aided by a fresh globally sourced line-up.
One such model will be the first large-scale right-hand drive Mustang sportscar, which in December last year had already attracted significant attention with 1200 orders, despite being more than a year away.
The latest figures show that number has now risen to 2000 pony car fans putting money down and 20,000 “expressions of interest” ahead of its arrival this December.
Its local range will swell to 20 models in five years, but for now, the company's top-selling vehicles continue to be the Ranger ute and Focus small hatchback ranges.
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