Ford launches "real-world" pricing for Falcon

Ford's upgraded Falcon FG MkII is now better aimed at buyers.

It wasn't a question of introducing bright colours, larger-than-life graphics or go-fast bolt-ons. What the Falcon needs, according to Broadmeadows, is pricing that places it in the same target environment some of its competitors already occupy.

Long story short: the entire Falcon sedan model range — including the basic XT (pictured in MkII guise) — was priced above $40,000. Buyers searching online for an affordable new car for the family wouldn't find the Falcon unless they were prepared to pay above $40,000 — yet history shows that many Falcon buyers actually pay less than that sum.

"Falcon, the XT as a base model, has had an MLP above $40,000 only since July 1 last year — when we introduced Euro 4. That's when it sort of crossed that threshold. But that could be — in the customers's mind — a threshold they don't want to go over," Ford's Public Affairs Director, Sinead Phipps, explained to motoring.com.au this afternoon.

"So this is really about just making it a lot clearer, and it's also recognising that customers in the market to buy a car today aren't just comparing Falcon with its traditional competitors. They might be comparing it with SUVs or they might be comparing it with a smaller vehicle...

"We need to be competitive, not just in the large-car segment, but in the overall market..."

Where, in the past, Ford could rely on selling to fleets and educated private buyers who knew the only other game in town was Holden's Commodore, the market has changed — forever. Buyers who might be tempted by Falcon don't necessarily know it exists and don't stumble across it in cyberspace. If they do, it may not occur to them that the big Ford could be within their budget while they're looking up large family cars under $40,000. Inevitably, they will buy an SUV or a Camry... perhaps even a Mazda3.

The disconnect between advertised price in the company's official marketing material and the actual transaction price was becoming a secret known only to Falcon-buying cognoscenti.

"We have been advertising the manufacturer's list price for some time now," Phipps continued, "but [that] doesn't necessarily always equate to the real-world transaction price that customers are paying, so it can be confusing if someone's on our website doing a build and price. They get one [price] and then they go into a dealer and they get another. In some cases, the official price might stop them from going into a [dealership], because they think it might be too much, in comparison with what might be advertised by others.

"So we worked with the dealers and decided that we needed to make our list price more in line with the real transaction price that customers are currently paying."

Given the reduction in MLP (manufacturer's list price), some recent Falcon buyers could be forgiven for thinking that the resale value of their cars may suffer as a consequence, but in theory that shouldn't be the case, since the practical transaction price is unlikely to vary much between FG and FG MkII models.

According to Phipps, buyers are likely to understand that any new car will be an upgrade on the old one and depreciation is inevitable. It's the technology upgrade likely to have a greater impact on retained values than the pricing regime.

"Consumers in today's day and age are very used to always being upgraded," she said. "There's a lot of new technology going into this vehicle as well, so we think customers are used to that."

Coupled with a refreshed model delivering significantly improved equipment, the new pricing regime expands the Falcon's appeal into segments where it hasn't been before, as mentioned already. Ford has claimed in the past that large-car sales are being surrendered to small cars. This is a chance for the company to reacquire some of those lost customers.

"It's recognition that we need to be competitive with more than just our traditional vehicles that we compete against," Phipps concluded.

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