Only way is up: Falcon sales bottomed out?

Less than 2000 Falcons were sold in January: the lowest monthly figure in at least a decade and almost 25 per cent down on the same month last year. Yet Ford Australia boss Tom Gorman is confident that, despite its disappointing start, the beleaguered blue-badged large car will weather its run-out year well.

"The large car market is going to be the challenge this year," Gorman told the media at his regular monthly briefing.

"I'll put the cards on the table -- it is going to be challenging [for Ford] because of all the newer product in the segment and it is going to come down to a lot of strong tactical marketing actions and great support from our dealer body."

Indeed, the Ford boss is remarkably upbeat, categorising the January Falcon sales performance as the likely low volume mark for the year.

"January is always a soft month [for large cars and Falcon]," Gorman said.

"We did not expect to be under 2000 -- we really missed our number by several hundred. We were planning a low number by historical standards but not that low. [Nonetheless] we think we've called the business appropriately. We've dialled-in both the segment size and our share of the segment and we think this is an honest, balanced assessment, and have planned our business accordingly

"We took a substantial down balance in our [production] facility [late last year]. We took 20 per cent of our productive capacity out and we did that based on what we assessed the industry and our share of that industry would be this year -- we think we've made the right decision," he said.

He said the sales estimates showed a 'bounce' in February and that the final year of the current Falcon was not about wholesale discounting.

"It's not just cutting the wholesale price. We want to make sure there's a good value story as we make the transition to the new vehicle."

"We do use feature content within SVPs [special vehicle packs] as a way to go to market -- we give content to the consumer at a very attractive price point and we communicate it and advertise it aggressively. I think you're going to see that from us during the year," Gorman revealed.

"There are [also] different ways you motivate dealers to concentrate on one vehicle line over another and we will continue to do that," he said.

January was a record month for the Australia new car marketplace; almost 10 per cent up on 2006. Indeed, a measure of the strength of the marketplace was the seasonal adjusted rate which had the total annual market at over 1,100,000 units -- Gorman described it as "a very robust month".  Yet despite Ford posting its best volume in the burgeoning small and light car segments since 1995, the company's overall market share slipped below 10 per cent.

"Obviously we're not pleased with our performance -- below a 10 per cent share, albeit the industry travelled at 1.1m rate. From an absolute volume we're up on last year but the share was not where we wanted to be," he said.

He stated, that he was confident of the strategy the carmaker had in place for Falcon but that other related product need more work.

"All of the tactical actions on large cars we're pleased with… We came close to our volume number in the month and we're going to see an up tick in February so we're pretty confident on Falcon but I think we need to do more work on other segments. I think we need to do more work on ute -- we need to be more aggressive there. We need to keep the momentum going on Territory and we need to keep the good momentum going on small cars," he said.

Gorman stated the carmaker would build upwards of 70,000 cars at its Broadmeadows plant this year -- with a monthly running rate of approx 2500 Falcons, 2000 utes and 1500 Territorys plus exports.

The current Falcon has more than a year to run and will not be replaced until well into 2008. An indication of the timing is the fact the so-called Orion replacement is yet to be spotted, even in disguise.

Boss Gorman says the company is yet to finalise the series line-up of the new car -- another indicator there's plenty of time still to wait -- but confirmed that the new model would offer a V8 engine as part of the range. He scotched rumours of a diesel engine being offered in the new Ford from launch however.

The focus of diesel development remains the Territory, he said.

To comment on this story click here.