Big pain for Ford

VFACTS figures seen by motoring.com.au spell bad news for Ford Australia.

Inclusive of all imported and local product, all passenger, SUVs and commercials, the Blue Oval sold 5357 vehicles in January – nearly 1500 fewer than during January 2014 (6804).

Despite the release of its final Falcon in December, the steady sales decline of Ford's large car continued, with sedan sales attracting fewer than 400 buyers for the month (381). The Falcon Ute was also down, with sales totalling 163 (versus 237 in January 2014). Territory dropped back slightly, year on year, from 681 to 639 for the month.

But Ford's problem doesn't rest with the local product alone. The well-regarded Fiesta (pictured) and Focus lost 384 and 916 sales, respectively. Fiesta sold 963 units in January last year, but just 579 last month. The signs were even worse for the Focus, which lost 44 per cent of its tally in January, when sales plummeted from 2074 last year to 1158 for 2015.

Kuga fell back from 496 in January '14 to 282 last month. And the new Mondeo can't come soon enough, with just 59 of the current car sold last month – compared with 201 in January last year.

Ranger 4x2 was down slightly, from 373 sold last year to 314 last month.

Only the EcoSport, Transit and Ranger 4x4 sold better last month than in January 2014. The EcoSport had only just gone on sale in January last year, so the only way for sales to head was in an upwards direction. Transit is all new and the range includes the Custom model, which had not previously been available. Ranger 4x4 (1470 sold last month) is 226 units up on the sales figure for January 2014.

Ford's problems are varied. The company has frequently been slow out of the blocks due to heavy reliance on fleet sales. With fleet managers and purchasing officers on leave during the month, there usually isn't the sales base to draw on. But back in September last year Ford Australia's Communications & Public Affairs Director, Wes Sherwood told motoring.com.au that the company was growing its pool of private buyers.

"Our sales have been fairly stable this year, but what's happening beneath the line is the structural changes that are going on are amazing.  I mean, we are shifting from this fleet separate sales model to a retail model," Sherwood said at the time.

Ranger's sustained sales growth (nett combined sales are ahead year on year, despite the 4x2 losing 59 sales for the month) is a sign of Ford's expanding private sales orientation.

In conversation with motoring.com.au this morning, Sherwood reiterated that Ford's sales slump in January is a product of the company's strategy to mould the sales mix to a richer blend of private ('retail') buyers. This has had an impact on sales, Sherwood says, with January following the trend set by months in the latter part of 2014.

"If you look at the year to year comparison, it's a pretty big drop, [but] if you look at the later months last year, it's more along the lines of where we've been..."

"As we continue to restructure our business, we are transforming the kind of business we're going after; we're going after retail customers, and building a sustainable base of sales that will propel us into the future."

"You're seeing some signs, in different pockets, but overall our emphasis is focusing on retail customers – that's the approach that's leading to generally lower sales.

"Ideally, you would want to have something like Ranger, where not only are you getting more retail sales, but your sales are going up. That's the best world [outcome].

"But to get to a solid foundation we have to really get to that base of a richer retail mix of sales – and that's what we're getting at. Once we get to that level, we start trekking back upwards, but that's not going to happen overnight."

As an example of the way the new marketing strategy has affected sales, Sherwood offered rental car sales. In the past Ford sales to rental fleets amounted to 7500 units a year, but in 2014 it was as low as 1000 units.

The 2015 Kuga update has only just gone on sale, with the earlier model still listed in Ford's plate sale. Demand for the updated medium SUV will be dampened by the need to clear the existing stock – although they're all Kuga sales numbers and all bundled together for the purpose of VFACTS registrations.

Mondeo, a car that is tipped to be Ford's largest passenger car in the market once Falcon production ends, is now an old design. Sherwood mentioned back in September that the current model was a fleet queen in Australia, finding relatively few homes with private buyers. Ford expects that to change with the introduction of the new model and the company's Public Affairs department is currently working on a launch strategy for the new Mondeo.

Of real concern to Ford must be the Fiesta light hatch and the Focus small car. Both vehicles are promoted as premium, Euro-style passenger vehicles that should be considered top-shelf offerings in the market. Rivals to the Fiesta – Holden Barina, Honda Jazz, Hyundai i20 and Suzuki Swift – all outsold the Ford in the light car segment last month. In January 2014 the Fiesta outsold them all. It's a dramatic change of fortune for the Fiesta.

The situation is an echo of the small car segment, with Holden Cruze and Volkswagen Golf both outselling the Focus last month, when the Ford had them beat in January 2014.

Ford is looking forward to a refreshed Focus around the middle of this year, however, along with launches for the new Mustang and Everest models, both of which are expected to build "incremental" sales, according to Sherwood.

"We're very comfortable that our product strategy to keep some of the freshest products on the market out there is the right one. But this is the most competitive segment in a country with the most choice.

"It's probably where we're going to have some of our tougher decisions, because you can go and try to chase share in this market – and that leads you to one strategy and one approach – or you can focus on the retail customers. That's what we're deciding to do.

"We realise we're not going to have the headline sales numbers, but we do believe this is the path to building a sustainable business that will take us well into the future.

"I keep pointing back to Ranger; it's not happening across our line-up yet, but that is overall the strategy we're going after."

Sherwood wouldn't be drawn on sales forecasting, but said that Ford's strategy has been rolled out successfully around the world, and he sees no reason why Australia should be any different.

"This is going to be a consumer-driven transformation; customers are going to tell us how many vehicles we're going to sell. If all these things come into place, we think more customers will ultimately be attracted to us.

"We know it's a formula that's working around the world, particularly with all of the great new products coming... our busiest launch year ever, here.

"We think there's a lot of opportunity, but we're not going to get into the game of projecting out sales, because that again starts driving you to a different strategy."

Sherwood says that morale within Ford is generally good, and the company's customer satisfaction (sales) rating has lifted from 12th to second position out of a selection of 20 car companies.

The overall market for January fell by 0.2 per cent, year on year. For January 2014 the market totalled 82,285. Last month it was within range at 82,116.

Of the volume-selling brands other than Ford, Holden's figure of 8401 for the month was a 5.3 per cent downturn but Honda actually lifted sales by 9.4 per cent to 2703. Hyundai, on 6901 for the month, dipped 3.5 per cent, but Jeep gained 13.8 per cent to finish on 2283. Kia wound up with 2416 sales last month, 2.7 per cent down, and Mazda was also down – by 4.3 per cent to 9006. Mitsubishi also lost ground in January, down 1.4 per cent to 4080.

Nissan's stocks lifted by 6.7 per cent to sit at 4537 sales. Subaru also moved ahead, by 1.7 per cent to 3104 sales. Suzuki enjoyed a strong month – in percentage terms – with sales finishing 39.9 per cent up, at 1609 sales. Toyota sales barely moved during the month, up just 0.1 per cent to 13,661 units.

That was just 15 cars more than in January 2014, but enough to hand Toyota market leadership once more. Volkswagen was another company to enjoy an improving sales outlook, up 8.6 per cent to 4397 sales for the month.

Of the mainstream prestige brands Audi was up 14.2 per cent at 1925 sales, BMW was up 12.2 per cent – but beaten by Audi on 1732. Mercedes-Benz was ahead on 2274 sales (not including commercial vehicles).

Mazda3 was the best selling car for the month, reaping 3903 sales in January.