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New Falcon: Ford fightback starts now!
Falcon sales are set to rise, but not enough to topple Commodore
25 Sep 2002
By BRUCE NEWTON
AFTER 60 months of Commodore sales domination, the message from Ford executives is clear: the fightback starts now with BA Falcon.
On sale from September 30 at virtually the same time as the restyled VY Commodore, the new Falcon has not only $500 million invested in it, but also the ambition of Ford Australia.
Company president Geoff Polites is confident BA will eat into Commodore's sales domination, which in 2001 ended in a lop-sided 85,422 sales for the Holden and just 53,534 for Ford's large car in AUII/III guise.
It is an assessment of the future that Holden does not agree with, most notably outspoken executive director sales and marketing Ross McKenzie, who is confident Commodore will maintain its sales momentum.
It was Mr McKenzie who elected to retail VY without a price increase in an attempt to maintain the pressure on Ford.
"Ross McKenzie says he's not going to lose any volume," said Mr Polites. "Well for us to sell our volumes he has to lose volume.
"So one of us is going to be wrong."According to Mr Polites, it all comes down to a numbers game. Ford will be able to build about 97,000 cars domestically next year at its Broadmeadows assembly plant including Falcon sedan, ute and wagon, as well as the long-wheelbase derivatives that get their update in March. That's a daily running rate of 412 cars.
Of that total, Mr Polites wants as many as 65,000 to 70,000 to be BA Falcons.
He acknowledges that will not be enough to reclaim the large car market lead - particularly as Holden's Elizabeth plant has superior capacity - but it should be enough to get Ford within a few percentage points of Commodore, as opposed to the yawning 47 per cent to 27.7 per cent gap that currently exists.
"Between us and Holden we run about 75-76 per cent of the large car market and we are currently about 29 per cent, which means they are about 47 per cent. We have to close that gap quite dramatically," Mr Polites said.
"Market leadership is not one of our aspirations, it may well fall out somewhere down the track but it's not what we are striving for.
"Our vision of success is to sell what we make and make our capacity. If we do that we are a very, very viable car company.
"If we sell our 412 a day we will be very profitable and that's our plan. Now we need the market to hold, and then we need to lift our share.
"It's not going to happen overnight, the harsh reality of life is there are a lot of people who have got Commodores and are really happy in them. They are not all saying 'for God's sake build a car so I can get out of this thing'.
"They have got pretty satisfied owners so we have to take them off them - and that's going to take time."Mr Polites acknowledged the vital importance of fleet sales in their various forms, which take between 70 and 80 per cent of all large car sales, but rejects Mr McKenzie's claims that fears of more Falcon residual problems and loyalty to Holden will keep fleet buyers out of BA.
He said large fleet customers were actually "barracking" for Ford to get BA right.
"That's because they have 60 to 70 per cent of their fleets as Commodores and it's a big bet in terms of the residuals," Mr Polites said.
"It is much better in terms of residuals to be betting 50:50 or slightly one way or the other. To the extent we produced this car and they are prepared to say 'Gee this is a really good car and in three years' time it's going to have good residuals' then they go 50:50 pretty quick. And that's where they would rather be."Mr Polites admitted the way AU was launched to fleets had been wrong because there had not been enough prior consultation on pricing. This time around, Ford had adopted the opposite tactic, he said.
"We've involved fleets in this project. They have had a lot more exposure to the product along the way to what they have normally had, so they understand what we have done pretty well and in some instances we have responded to input from them," he said.
Holden criticism of Ford's brand image and dealer quality also cuts no ice with Mr Polites.
"On brand image I would say they (Holden) have been (ahead of us) - but that is changing and will change. But your brand image is really a reflection of your product and this (BA) is the start.
"In the next 18 months we'll change our whole model line-up because we'll put a B-car (Fiesta) in, we'll have Focus, we'll have this car, we'll have E265, we've just got Courier (launched in November). We become a different company and the brand image changes accordingly.
"As to the calibre of our dealers we'll just have to wait and see. The dealers and I have had a pretty frank discussion about what Holden think of their capability. They didn't agree with them."Mr Polites also confirmed a new look for Ford dealerships that will begin rolling out soon and take three-to-four years to complete.
The launch of BA Falcon has also ushered in a new corporate positional statement - "No Boundaries", which replaces "We have ignition".
"We have ignition was always a transitory thing," Mr Polites said.
"We really wanted to lay down the fact that we were changing and our view was this car would mark the change point, and when we launched with 'We have ignition' that was the plan.
"It reflects no boundaries for the customer, but it reflects no boundaries for us as well - it's a statement of where we want to be."The ad campaign for Falcon - which launches during Network 10's AFL Grand Final telecast on September 28 - will have the promotional line "New Falcon. Can't get enough of this".
No doubt Mr Polites and his team at Broadmeadows hope there is a fair degree of truth in that particular piece of advertising.
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