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Future Ford Oz exports unlikely

Blue Oval chief: Ford Asia Pacific and Africa president Joe Hinrichs at the Delhi unveiling of the EcoSport crossover.

Regional boss says high production costs and currency make Australia uncompetitive

9 Jan 2012


FORD regional boss Joe Hinrichs does not believe that exports from Australia are viable due to a strong currency and high costs associated with manufacturing in this country.

The Ford Asia Pacific and Africa president said that offering vehicles that Australians actually want at the right price is the priority as the company continues to widen its model range.

The announcement of the Kuga, Kuga II and EcoSport SUVs to be introduced over the next 18 months and the switch of Focus production from Germany to Thailand later this year to reduce costs are key strategies in reversing Ford’s market share slide in Australia.

“I get asked that question all the time – why isn’t Australia developed as an export base?” Mr Hinrichs told GoAuto at the Delhi Auto Expo in India last week.

“It’s not presently construed to be a competitive export base, honestly, (due to) the higher Aussie dollar, historical labour agreements and other things.

“Our strategy is to be where we have scale for manufacturing, and we do it all around the world, but the most important strategy we have right now is to bring a full product line-up into the showroom, and for that product line-up to be fully competitive. That’s how you shore up market share losses.

 center imageLeft: Ford EcoSport, Kuga II, Focus.

“That’s the most important thing for me looking at Australia – how do you stop the market share degradation how to offer a product range that is competitive enough and compelling enough for customers to want to continue to keep buying Ford?“The challenge that we face in Australia is that customers are more and more buying imported products, frankly. And it’s not just a Ford issue, as you know. It’s an industry issue.

“The other challenge that we constantly have as an industry is keeping enough volume from a manufacturing standpoint in Australia for the supply base to be viable and competitive, because 70 per cent of the cost of the vehicle is in the supply base.

“We care about manufacturing. But we also have to run a business that is a profitable business that keeps growing. And that’s where we want to be in Australia.

“The encouraging thing is that, in the new products we’ve launched – including the freshening of the Territory but also the Fiesta, Ranger and Mondeo – we’re seeing growth. And the new Kuga and EcoSport will be great for Australia.”

Mr Hinrichs used the example of Ford’s about-face in 2009 with regard to building the Focus in Broadmeadows to further illustrate his point of fixing the local model range rather than chasing exports.

He said the original decision to build Focus in Australia was made prior to the company adopting the global ‘One Ford’ strategy.

“We looked at it and said, ‘Wait a minute, if we have one product serving all those markets, shouldn’t we have scale and build it in one location, and what’s the best location given duties and everything?’ We determined that if it is Thailand then it can serve ASEAN and Australia and New Zealand and other places.”

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