Falcon under the microscope

Ford Australia marketing and product planning teams will shortly begin weekly meetings with Ford North America to draft a workable plan for Falcon’s future, according to a senior executive for the company.

“The Falcon is at a critical tipping point in Australia,” the executive told motoring.com.au, under condition of anonymity. And tipping or not may have already been decided by the market, based on VFACTS figures for the large sedan over the past 12 months.

“You can look at Falcon’s sales statistics and trends,” said our source, “Falcon sales are trending downward along with the entire D-segment cars. You don’t need to trend too far out to see that continuing with Falcon doesn’t make sense.”

The problem for Ford ditching the Falcon, however, is three-fold. What happens to Territory, or the Falcon Ute, for one thing?

The SUV shares its platform with the Falcon and has outsold the sedan in recent months. Would Ford willingly walk away from combined sales of nearly 40,000 locally manufactured vehicles sold last year? That could be the difference between short-term profit and a large-scale loss.

The Mondeo might soak up some Falcon sales and the Ranger may displace the Falcon Ute to an extent, but the Kuga is too small to suit typical Territory buyers.

That would leave Ford no option — assuming the company wants to remain part of the large SUV segment — other than importing the Explorer. Even then, those imported models are unlikely to yield the same market share as the locally built models.

Secondly, would the end of Falcon mean the end of local manufacturing? Our source hasn't been clear about that. If the local engine and vehicle assembly plants were to close, retrenching staff would be costly in the short term. And what would be done with the existing manufacturing facilities?

If, on the other hand, the local plants switch over to building new designs to replace Falcon, Ute and Territory, can those new models be assured of selling better than the current ones?

The third problem for Ford Australia is a combination of brand perception and an uphill struggle to market and promote what has been generally regarded as one of the best volume-selling product ranges in Australia.

Our source looks to brands such as Hyundai/Kia which has reinvented itself with inspired design influences from its new design studio in Frankfurt, Germany and a diligent product plan that pins fuel efficiency and driving dynamics atop the list of brand qualities.

But it might be argued that Ford in Australia is hamstrung by its iconic status. Can the company reinvent itself when many prospective buyers still associate the brand with taxis at one end of the spectrum, or V8 Supercars at the other?

Our source claims Ford Australia will need to learn how to engage new Australian buyers and create desire. “How we do that will be an important topic of our weekly conversations.”

That suggests that Ford in the US is unhappy with Ford Australia's overall sales and marketing performance in recent times. Focus and Fiesta sales combined for 2011 totalled around 25,000 units — a long way shy of the combined VFACTS tally of over 45,000 units for Holden's Cruze, Barina and Barina Spark.

Mazda2 and Mazda3 together notched up nearly 59,000 sales and Toyota's Corolla and Yaris sales aggregate came to around 52,000 for 2011. These are the segments (light and small-car in VFACTS, or B and C segments) where Ford's management team in the US believes the Australian arm needs to be more active, rather than the large-car/D segment where the Falcon is positioned.

Falcon sales may be a long way down from where they were in the mid-1990s, but last year the sedan sold nearly three times the number of Mondeos pushed out the door. Could Ford sell more Mondeos if the Falcon weren't around?

All these issues, and more, will be likely topics of conversation during the weekly review, but there's already one positive outcome, according to our source. Australia may be geographically part of Asia and the Pacific region in Ford's world, but it is a very different market, demographically.

“We know Australians have very different buying habits and desire different product features than do Asian markets. We need to do a better job of building customer interest in new Ford products, and we need to improve how we introduce new products to market in Australia.”

-- with staff

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