Ford NZ trims range to ease burden

FORD has cut its vehicle line-up in New Zealand to concentrate on core product as sales numbers fall.

Newly appointed Ford NZ managing director Trevor Auger told GoAuto that Ford had trimmed its list to decrease the number of models that dealers must carry on the showroom floor.

“That reduces a dealer’s operating expenses so we’re freeing up cash for them to do business with on a day-to-day basis,” he said.

Finance company UDC, which stepped into the breech to provide floorplan funding for all Ford dealers when Ford Credit left NZ two years ago, believes Ford is on the right track with the moves.

UDC Finance head of auto and agriculture Glenn Tasker said that when Ford saw issues with the funding market up to two years ago, it decided to address it immediately, while at the same time cutting staff by a quarter.

“I think they were ahead of the game and they and their dealers will be in good shape because of that,” Mr Tasker said. “The last six months have been quite trying for most people in the industry and most have been over stocked, which presented them with a number of problems.” In NZ, the Ford Focus small car competes in a segment with 20 brands, 15 of which suffered a drop in share last year. Focus share rose 1.55 per cent to 10.4 per cent, but Mr Auger nonetheless has axed three models – the 1.6 manual hatch and wagon, and the 2.0-litre manual hatch.

The decision acknowledges the market’s continuing shift to autos.

Left: Mondeo XR5.

The XR5 Focus remains, but the XR5 Mondeo has gone. Diesel Mondeos account for a quarter of local sales, thanks to their fleet appeal. The model increased its segment share, but the 2.0-litre sedan and wagon manuals will be cut, along with the Zetec sport pack and XR5, which is only available in manual in a bracket that demands autos.

Mr Auger said just 20 sport pack cars were sold last year, along with 31 XR5T (including press test cars), leaving 15 still on dealer floors to compete with low-end Falcons.

Falcon retains its fourth spot on NZ’s model charts and gets the smallest cut. Only G6 will leave the range. Falcon sales since the FG’s launch number 2181, of which only 264 were G6. Mr Auger said the G6 was pitched too close to XR6 and potential buyers stepped up to G6E or ET.

Meanwhile, the Falcon ute line-up has been slashed. Only XR6 4.0 five-speed auto and XR8 5.4-litre six-speed auto variants remain, with XL cab-chassis and pickup and XR6T pickups gone.

Mr Auger blames increased refinement of double-cab workhorse utes for the drop in sales, but the main driver is that small-business customers who traditionally considered car-based utilities now are thinking twice about a new car.

Ford NZ sold 119 FG utes in the last six months of last year, “which is hard on dealers with cash tied up in inventory”, according to Mr Auger. He plans rigid control of inventory.

UDC’s Mr Tasker confirmed that Ford now had its stock well under control.

He said companies that had their product and prices right and were strong in customer satisfaction would do well this year.

Meanwhile, Mr Auger said Ford's priorities were to finance the business plan, improve the balance sheet and maintain liquidity. He had no plans to drop dealers.

“I have a good relationship with dealers,” he said. “But I have to balance that with the fact I’m going to have to say and do some things that won’t be popular.” However, he is confident Ford and its dealers will pull through. “If we go through a bit of a storm, they’re as well placed as any dealers in the country to get through that storm.” Mr Auger’s CV includes a psychology degree and finance and customer service roles. This background may stand him in good stead as customers and industry batten down the hatches.

Mr Tasker said that UDC was investing more now than 12 months ago “as the market will get out of the doldrums and we’ve got to be ready for it”.

“You can’t cost-cut out of a recession,” he said. “I believe the motor industry is here long term, and that’s why we’re investing.”