Whether it's from the www, the latest motor show or the back doors of a carmaker near you, Carsales Network Confidential features the good oil other sources either won't publish, don't care about or don't know. Heard an automotive rumour or new model tip? Then let us know at editor@carpoint.com.au
>> Crennan's Clayton retirement
The scepticism greeting HSV's announcement that founding managing director, John Crennan (pictured), would retire in July 2005 was well-founded. Although former Rolls Royce and HSV chief engineer, Phil Harding, was installed as his replacement, Crennan maintained a strong onsite presence as HSV's non-executive chairman.
This presence was so close to the action that Crennan seamlessly stepped back as temporary managing director early in 2007 until a replacement was found to cover Harding's return to the UK as HSV's new director of export operations. This process ended with the April appointment of former Lexus executive, Scott Grant, as HSV's new head.
As the handover stage including the launch of the new Grange is now complete, Crennan is set to establish an office located well away from HSV operations for the first time in its 20-year history. The actual location will be announced soon.
Crennan brought a strong Holden engineering and marketing culture to the HSV organisation and with it an unwritten 'nuts and bolts' clause in staff job descriptions that saw personnel deployed from the office to other areas to cover overloads. When Crennan 'retired' in 2005, nothing much changed as Harding also came from a manufacturing background.
According to HSV staff, the new Grant-led (dare we say, Lexus-like) culture is already making its presence felt as the focus of each staff member is becoming much more disciplined. Under growing production volumes, a shift in market positioning and new export opportunities, major disruptions to normal responsibilities are no longer an option.
This shift in culture reflects the advances made by the company as it approaches its 20th birthday.
It also says something about the huge change since the days when John Crennan himself worked through the night alongside his engineers and assembly workers to get the first Group A cars ready for dealer and media presentations.
Even if his first retirement was soon revealed as a Clayton's retirement, Crennan's latest move from Clayton is being treated seriously as the most powerful indicator yet of a new era at HSV.
As for Harding, the latest reports are that he has borrowed Tom Walkinshaw's GTS to tow a new Elfin fresh off the boat from Australia up to Scotland in the original HSV tradition! The more things change...
>> Territory repositioning attracts new buyers
It's a simple proposition: reduce the price and take sales from your competitors. Now, Ford has reduced the price and added value to its Territory to attract new buyers who weren't even in the market.
The Ford Territory has been a real success story for the local manufacturer. Consistently the top-selling SUV since its introduction in 2004, the 'Terri' has combined onroad dynamics close to that of BMW's X5 with an almost-peoplemover spaciousness and robust, but refined and affordable mechanicals.
Turns out it was a blend attractive to many. The fact that sales of the RWD models are consistently better than the 4WDs shows that not everyone buying SUVs was doing so for offroad ability.
The success of the Territory has led Toyota to settle on a front-wheel-drive variant for the next Kluger's entry-level model and it's not often that Ford leads Toyota into a market niche these days. So all credit goes to Ford for having developed a car that is cost-effective to produce and still sells profitably in respectable numbers.
But where to from here?
Ford has already announced that (repudiated FPV variant aside) the Territory will not get any sort of make-over prior to the release of the next Falcon early next year. So what do you do, if you're Ford, to keep the Territory fresh?
Reduce the price and include standard DSC? That sounds pretty mundane, but it places the well-known and highly regarded Territory eyeball to eyeball with the new Kluger.
Ford won't admit that the repositioning nobbles Toyota's launch of the Kluger, but it gladly concedes that sales of the Territory remain pretty strong, even with new entries in the medium SUV segment, such as Holden's Captiva.
Sales of 2056 Territorys in June 2007 weren't as good as for June last year (2225), but with Captiva taking 1066 sales for the month and not having been an entry in the market for June last year, Territory's loss of sales was expected and it remained the top-selling SUV anyway.
Sales in the medium SUV segment for June 2007 were 500 units ahead of sales for June 2006. Subtract Captiva's sales and the whole segment would have been about 500 units down on June last year.
On the face of it then, Captiva attained half its sales from competitors and incurred the other half from 'new' buyers to the segment -- that's if you accept that the SUV market hadn't changed from June '06 to June '07.
The point about the Captiva is that it's a new entry in the segment and it has possibly expanded the segment by bringing in new buyers. Those are buyers who specifically wanted to buy the Captiva and nothing else. They can be defined as 'Holden' buyers or 'under $35,000' buyers or 'like the looks' buyers.
Ford's repositioning of the Territory is setting out to achieve the same ends as the Captiva's: expand the sales across the whole segment, but particularly for the Territory. The theory goes that the larger the segment, the more sales for everyone. This seems counterintuitive, but less diversity means fewer sales, because people aren't attracted to one model over another, necessarily -- so they don't buy in that segment.
Territory buyers are usually committed to buying the vehicle anyway, but in some cases, haven't been able to afford it. With the price reduction and inclusion of standard DSC, Ford has offered Territory buyers a two-pronged argument for buying.
According to Ford's Mark Winslow "You get the market equation right in that three-quarter of the way up the $30,000 bracket and you'll actually bring people into the market."
So that's one argument: people aspired to buy the Territory anyway (as opposed to any of the car's competitors) and now they can afford it.
Winslow alludes to the other argument when he says "Occupational health and safety is at the top of everybody's list."
DSC is a safety feature right up there with ABS and Holden's original radial-tuned suspension as a dynamic safety feature that will sell cars.
Will Ford's Territory tweaking bear fruit? What difference will the new Kluger make? Our guess? Even more medium SUV sales for June 2008...
>> Territory template for Mondeo marketing
Just two months away from re-launching the Mondeo in Australia, Ford has been asking its dealers for their opinions of the Euro-sourced mid-size car.
Ford Australia skipped one generation of Mondeo, with Mondeo II being a much more conservative design in styling and a paradigm for the LS Focus, which was also more conservatively styled than the original LR model. The new (bigger) car boasts styling cues inherited from the Iosis concept (more here).
The reason that Ford jumped one generation of the Mondeo and is now intending to launch the third generation can be traced back to a couple of factors. Mostly, sales of Falcon are down and the Mondeo is a chance to pick up some sales that would have gone to Falcon in earlier years, but in these straitened times of high fuel prices are heading elsewhere.
In contrast, sales in the medium segment are actually showing signs of picking up, after years of marginal growth -- and Ford believes the Mondeo will add volume to that segment.
Ford doesn't believe that the growing number of buyers in the medium segment can be laid totally at the door of the shrinking large car segment. Buyers decamping from large cars are just as likely or even more likely to buy an SUV or a high-specification small car. They're paying the same money for small cars as they would have been paying for entry-level large cars.
Part of the reason that the medium segment has stagnated in past years is because small cars have improved markedly. Interior space of a TS Astra was comparable to the medium-sized JR/JS Vectra, so unless you wanted the V6 Vectra, there was virtually no point buying the larger car.
Similarly, as Ford points out, the current LS Focus (and new LT model, more here) is essentially the same size inside as the last of the Mondeos sold here.
New Corolla offers the same internal dimensions as the old SV20 Camry.
The medium segment cars have to offer more now to pick up share from the booming small car segment.
Taking a leaf out of cousin Mazda's book, titled 'The Mazda6', Ford is not aiming the Mondeo at the rental car market. It won't be cheap as chips but Ford will be careful not to repeat the mistake Holden made with the ZC Vectra -- it must not be too pricey and top-heavy with costly features.
Surprisingly, Ford's "blueprint for success" with the Mondeo is none other than the Territory SUV. With the Territory, Ford asked dealers what their customers wanted. The feedback for Territory was high quality and helped Ford peg the market demographic to establish the vehicle's design parameters.
Ford has not said how this translates to the fully-imported Mondeo but rest assured that the product planners for Mondeo have been working speed dial buttons to their dealers over the last 18 months.
>> FPV's Power Within
This week's announcement of a new General Manager for Ford Performance Vehicles (more here) raises almost as many questions as it answers.
When the new appointee, Rod Barrett, is the former Commercial Director of Ford Performance Racing (FPR) and was 'on site' all along, the question is why did it take six months? It is not as if the six months period when FPV was without a General Manager (and a pro-active media presence for almost as long), has been kind to FPV or its dealers.
Although Prodrive Asia Pacific Managing Director Bryan Mears announced this week that FPV has just recorded its equal second-best sales month ever, this is only a thumbprint view. June's sales figures were achieved on the back of a limited edition model announced and pre-sold in March but not built until May.
Preceding months provide a more accurate view of the challenges ahead for a new FPV general manager. After FPV sales overtook HSV in 2006, this is how the contest has looked following the launch of HSV's E-Series range:
Oct 06 -- 490 HSV, 198 FPV
Nov -- 515 HSV, 199 FPV
Dec -- 519 HSV, 146 FPV
Jan 07 -- 362 HSV, 135 FPV
Feb -- 357 HSV, 110 FPV
March -- 491 HSV, 184 FPV
April -- 475 HSV, 150 FPV
May -- 437 HSV, 176 FPV
Jun -- 406 HSV, 224 FPV
HSV's June figures slipped slightly as production was diverted to create pre-launch stocks for the new Grange which should be reflected in a strong July figure. FPV's July figures may also be inflated as the remaining examples of the GT 40th Anniversary reach their owners.
From here, FPV faces a tough run down the main straight before its BF Series II range reaches the chequered flag and a new contest can begin with next year's Orion-based models.
When Ford and Prodrive executives indicated that the search for a new general manager was still underway just over a month ago, could it be that no one wanted the job forcing Prodrive to recruit from within its ranks? According to sources close to Ford and Prodrive, which both have to approve of the appointment, nothing could be further from the truth.
Rod Barrett is the person largely credited with the changes in FPR fortunes this year. After several shaky years, the FPR team is resurgent in this year's V8 Supercar series. Because FPR is the showcase for Prodrive's local motorsport presence, the prospect of killing this purple patch along with its solid finances weighed heavily on Prodrive's UK management.
The initial reaction to moving Barrett across the corridor to FPV was "no way", hence the wide search for an outside appointee, according to our sources. Apparently, this changed when Barrett himself decided that he wanted the top FPV job, leaving Prodrive with little choice.
Since his appointment, the mood within Ford and FPV has improved. His close long-term involvement with Australian motorsport, combined with a strong business background is unprecedented outside of rival HSV.
This means Barrett is the first senior manager in a local Ford special vehicles arm since Howard Marsden in the 1970s with a hands-on understanding of the unique links between local high performance road cars and current race activities.
David Segal, who fronts the recently outsourced public relations firm that handles FPV's media activities, shares an almost identical motorsport background to Barrett. Since both men's paths have crossed on a regular basis, there is good reason to expect Ford's local performance heritage to be in safe hands again.
As Barrett becomes FPV's ringmaster for a flood of runout activities over the next six months, his biggest challenge is to build momentum ahead of the Orion's arrival without devaluing the brand as well as convincing Ford fans that FPV hasn't dropped the ball.
In the meantime, Prodrive's next priority is to find a replacement for Barrett by August 1 so that FPR is not compromised.
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