Industry outlook improving for '09, says Ford

One month of strong sales has been just what the doctor ordered for the Australian automotive industry.

Ford President Marin Burela has taken a cue from the June result to posit a favourable trend for the rest of the year -- not only for Ford (more here), but for the industry as a whole.

"I am particularly pleased -- not only with our results -- but with the fact that we had a great industry result," he told journalists at last week's sales briefing.

"What that does, it signals confidence by our consumers that things are slowly starting to turn around.

According to the Ford president, the Australian market is facing a result somewhere between 860,000 and 880,000 units by year's end. That forecast is still as much as 30,000 units higher than some importers have predicted in recent months. The key difference -- over the past three months or thereabouts -- appears to be the advent of government-implemented market stimulus activities, such as the investment allowance.

But now that June has ended -- and June being the final opportunity to buy before the end of the financial year -- what's to stop sales drying up in the latter half of '09? Burela has a response to that.

"I think we're going to see a slow-down in July; August will be interesting. I think we'll start to see a step-up again in September," he said.

"We believe that in the November/December period, that there will be a resurgence again in the light truck/commercial area -- and I think that will be driven again by the 50 per cent stimulus package that's out there for small business."

So government stimulus packages appear to be boosting the market, but consumer confidence shouldn't be overlooked as a factor.

"Economic indicators... continue to demonstrate that as we move into 2010 -- probably mid-to-late 2010, as you look at all the analysts' comments -- they tend to suggest that things are going to move in the right direction," said Burela, also ascribing Australia's relative economic strength to a mix of informed opinion via government communication and geographic isolation (as well as the 'known knowns' such as the security of the local banking industry and export earnings from commodities).

"There were a lot of people that were saying Australia's going to go into a recession, but if you turn around and look at the way the country has managed itself, in terms of fiscal policy and putting in the right stimulus at the right time... I think the communication that was out there from the government, how they continued to keep the country aware of what was taking place, I think was incredibly positive."

Burela even-handedly described the debate surrounding the fiscal stimulus packages as "healthy" and, swimming against the tide of public opinion, credited the political parties in Canberra for the "maturity" inherent in the political system.

"We're well positioned as a country to ride the storm -- and we've demonstrated that in the last 12 to 18 months. I think the government has been very focused and mature in their thinking, planning and execution."

It's also important to view the current market with a sense of perspective, Burela suggested.

"If I look at our industry, we've suffered clearly -- versus the peaks of 2008 -- but one could also argue that it wasn't too many years ago, when the industry was running at 850,000 [units], we were all celebrating and drinking champagne.

"And now, when we're at 850,000, people have been saying 'we've come to the end of the world'. Well I don't think we have.

"What we need to do is to learn and understand how to... be viable and profitable at 850,000 -- and when the industry's running at a million and 1.1 and 1.2, that's when you go out there and make sure you're delivering true value into the corporation."

Burela concluded with the view that it's within our grasp to ensure the economy remains buoyant and the local automotive industry picks up sales momentum.

"I'm optimistic... because I look at Australians and, as a country... we're just so resilient.

"The fact that we're so far away from the rest of the world where some of the more difficult things have occurred, actually almost insulates us, because I think some of it's almost mindset.

"If you're confident, you'll go and do things that only confident people will do."

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