Small car focus does not spell end for Falcon: Mulally

Ford is busy singing the praises of building a small car for the Asia Pacific region in Australia but is adamant it doesn't spell the beginning of the end for Falcon.

A triumvirate of Ford heavy hitters, local boss, Bill Osborne, Asia Pacific and Africa chief, John Parker and Ford Motor Company President and CEO, Alan Mulally, fronted the local automotive media this week.

Their message was that with appropriate support from government, Ford Australia is well positioned to capitalize on changes in local consumer tastes and massive regional growth for automobiles.

"Asia Pacific is going to be the largest automobile industry in the world," Parker told a small contingent of local auto media yesterday.

"China is heading to exceed the United States in terms of its physical [market] size and we're forecasting that by 2015 to 2017 [the] Asia Pacific [market] will be 30 million vehicles, largely small vehicles.

"That's why it's absolutely critical that our Australian operation makes the transformation from only building large cars -- which have got only one way to go, which is progressively down -- to making cars which are relevant to what the Australian customer wants and what the Asia Pacific customer wants.

"So [that's why] we felt we made a good choice a year ago when we decided we wanted to bring in the global Focus into manufacturing here."

The Focus deal is all the more important because according to global Ford boss Mulally, the move to small cars is a paradigm change -- and one that won't go away.

"As the commodity prices have increased, especially the price of fuel, the consumer worldwide is now valuing and moving towards smaller and medium sized more-efficient vehicles. And I think that is going to be a permanent transition -- I think we're starting to see the real cost of energy worldwide and an increasing focus on the environment as well as energy prices," Mulally opined.

"Ford is responding to that environment very, very aggressively… The first thing we're doing is we're matching the production capacity to the real demand... The second thing we'll do is aggressively transforming our product line to have more fuel-efficient, smaller/medium sized cars and utilities and we're doing that worldwide."

In Australia, Mulally says, the "exciting" things is "a lot of these things come together in the near term".

"We're going to match the production to the real demand, which means we can make fewer vehicles in the near term, but our commitment is to continue to invest in new vehicles for the future to [build] what people really do want in volume.

"We've got the new Falcon; we've got the new Territory; [and] we're working on some new powertrains for both of them going forward. But also we've announced that we are going to bring the new Focus into production here in Australia. And it will also be a Focus that we can export in the specific region…

"The purpose of our visit this time was to make further progress on this transformational plan and that we get a chance to review the industry and our plans with the government leaders and with our employees and with our suppliers."

With that, both Mulally and Parker are adamant the commencement of Focus production is not the beginning of the end for Falcon. Though at the same time neither will confirm the production or design centres of excellence for the next-generation Ford large car (see separate story here).

"We just invested $500m in the Falcon, we think it's the greatest product," Parker said dismissing suggestions that the arrival of Focus meant Falcon and territory production would cease.

Mulally too says Australia is still a great market for Falcon, and it's offshoot Territory. He says he believes that a "signifant market worldwide" exists for Falcon -- just not tomorrow…

"When you look at worldwide, we think about 60 per cent of vehicles sold are going to be the smaller size, about 25 per cent will be a medium size -- cars, utilities [SUV] and trucks [utes/LCVs] -- and about 15 per cent will be large [cars].

"Now, we look worldwide and Australia's very similar to the United States -- that 15 per cent, that 25 per cent, are still really big markets… so you want to have the right products in those segments. The real focus to be successful long term [however] is going to be that you have absolutely dynamite smaller vehicles…" the global boss stated.

"I think the Falcon is just a dynamite vehicle first of all. And there's going to be a significant market worldwide for the Falcon. Right now, primarily the Falcon is Australia and we also have an equivalent of the Falcon in the United States and around the world.

"Now, this leads us to the Ford plan going forward, because clearly the real strategy of Ford is to bring together the intellectual capability of the assets of Ford worldwide… We call it 'One Ford' [and the task] is to leverage these assets so over time we will have world class vehicles in every market segment.

Mulally won't say when that time will be however…

"We are not going to go that far now to say specifically when, but I think the story if you can capture it is, that Ford is moving towards global platforms [and] the leadership clearly for the larger vehicles and for the Ranger, and now for the [Asia Pacific] Focus, is going to be out of Australia.

"That's the real strategy… Now the details [such as], when you move to which powertrain, which platform, well, we'll keep letting you know that as we go along."

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