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Ford chiefs spruiking 'transition'

Ford has talked up its post-manufacturing future in Australia at an elaborate industry event in Sydney on Tuesday attended by the US-based brand's senior executives.
By · 14 Aug 2013
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14 Aug 2013
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Ford has talked up its post-manufacturing future in Australia at an elaborate industry event in Sydney on Tuesday attended by the US-based brand's senior executives.

But the car maker has refused to commit to local production up until its planned 2016 deadline, saying only "that's the plan".

"We'll always take into account the changing business environment, but we're very excited about how we transition here and we're very excited about the 2014 Falcon too," said chief operating officer Mark Fields.

Global Ford boss Alan Mulally made a surprise appearance at the event attended by more than 800 people and was the first of four big hitters who flew to Australia to shed some light on the future of the brand months after announcing it would cease local vehicle production in October 2016.

"We're here to show our commitment to Australia," said Mr Fields.

While dodging specific questions about long-term investment and individual models, Mr Mulally kicked off what will no doubt be a long-running campaign to convince Australians that Ford as a brand is here to stay.

He said the company would be "accelerating" new vehicle launches by replenishing its model range by 2017 and introducing at least three new nameplates, including the reintroduction of the legendary Mustang muscle car.

The executives also revealed the Everest SUV, which was developed in Australia, is to be produced overseas.

Ford claimed the $1.9 billion it had poured into local design and engineering teams over the past six years made it "the largest automotive R&D investor in Australia".

"Our Australian team is working in a fully integrated and harmonious way with our other three product development centres around the world," said Ford's Asia-Pacific vice-president, David Schoch.

"Their role in our future growth is critical."

The car maker's shorter-term targets are bolstering lacklustre sales, which have been dragged down by record low sales of the Falcon.

Ford's market share has dropped from more than 20 per cent in the mid-1990s to just 7.7 per cent this year.

Ford also gave a teaser of the new Falcon, which won't arrive until late 2014. As well as taking on the new breed of SUVs and mid-size cars, the Falcon will be competing with the Holden VF Commodore, which went on sale in June and has experienced a rare sales boost.

Last month just 594 Falcons were sold, setting a new record low for the model, and just one-seventh that of the top-selling Toyota Corolla and Mazda3 small cars.
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Frequently Asked Questions about this Article…

Ford has announced it will cease local vehicle production in Australia in October 2016. At a Sydney industry event the company’s executives said they wouldn’t commit beyond that planned deadline, describing it as “the plan” while emphasising they will consider the changing business environment.

Ford told Australians it is committed to the market and is repositioning by accelerating new vehicle launches, replenishing its model range by 2017 and introducing at least three new nameplates — including the reintroduction of the Mustang muscle car — to reassure buyers and support future sales.

Yes. Ford says it has invested about $1.9 billion into local design and engineering over the past six years, calling itself the largest automotive R&D investor in Australia. Executives said the Australian product development team is fully integrated with Ford’s global centres and will play a critical role going forward.

Executives teased a new Falcon due late 2014, confirmed the reintroduction of the legendary Mustang, and noted plans to add at least three new nameplates by 2017. They also revealed the Everest SUV (developed in Australia) will be produced overseas.

Although the Everest SUV was developed in Australia, Ford confirmed it will be produced overseas. This highlights the company’s move away from local vehicle manufacturing even when development work is done in Australia.

Falcon sales have been weak: the article reports just 594 Falcons were sold in the last month referenced, a record low for the model. Poor Falcon sales have contributed to Ford’s weaker overall performance in Australia and are a key reason for the company’s strategic changes.

Ford’s market share in Australia has fallen significantly, from more than 20% in the mid-1990s to about 7.7% in the year discussed in the article, underlining the competitive pressures the company faces in the local market.

Everyday investors should watch Ford’s execution of its transition plan: the arrival and sales performance of the teased new Falcon (late 2014), the Mustang reintroduction and other new nameplates by 2017, any updates on local R&D activity, and how these moves affect Ford’s sales and market share in Australia.