Why Falcon shouldn't be written off yet

Following a turbulent week of speculation regarding the future of the Falcon, it now seems possible that Australia's second biggest selling six-cylinder sedan could be brought into Ford's global plans and share its DNA with the Mustang.

Some media believe Ford CEO Alan Mulally cast doubt over the future of the Falcon when he told Australian journalists at the Detroit motor show earlier in the week: "People who make one vehicle for one country, a different vehicle, those days are gone." He also boasted that more imported Ford vehicles would head to Australia over the coming years.

This sent some sections of the media into a spin, but it has since transpired that history could be repeated and the comments could have instead meant that the Falcon may be reunited with the Mustang.

The two iconic cars were twins under the skin in the 1960s until Ford Australia decided it needed a tougher chassis to handle Australia's unique conditions.

The Carsales Network understands the reason behind Ford's secrecy around the future of the Falcon is because it is intrinsically linked to the Mustang, which is at a critical stage of development.

In his responses to questions from the Australian media about rear-wheel-drive, Mulally made the point several times that he is committed to rear-drive cars, thus taking some strength out of the rumours the Falcon might eventually go front-wheel-drive.

What has been overlooked until now is that the timing of future versions of the Mustang and Falcon are close enough that this could provide Ford with a golden opportunity to "marry" them.

The Mustang's 50th anniversary is in 2014. The Falcon is due for replacement in 2015. If the two vehicles were to share their underpinnings the planning would be at an extremely sensitive point right now.

The Carsales Network understands that Ford must decide within the next six to 12 months on what characteristics will be required to make the next generation Mustang, a highly profitable and iconic car for the Ford brand which outsells the humble Falcon by more than 10-to-1.

When interviewed by the Carsales Network, Ford Australia boss Marin Burela refused to comment on what possible link there may be with the Falcon and the Mustang of the future. When asked if the matter had even been discussed, Burela said: "With all due respect, it's simply not a discussion we're going to get into right now."

Meanwhile, Mulally told Melbourne's the Herald Sun newspaper: "We have learned so much from the Falcon. But as we go forward we'll continue to use all our assets around the world. Whatever that Falcon morphs to, for the next one, it will be available around the world."

He also gave the clearest sign yet that rear-drive was here to stay. He told the newspaper: "The whole thing about rear drive? We're going to have a rear drive car. And we've got the Mustang, so you can imagine going forward that there will be a version of the Falcon that will be even better. In capital letters."

This means that Ford Australia could be responsible for developing both the next generation Falcon and the Mustang -- in much the same way Holden did the engineering for the Commodore and the Camaro.

In Holden's case, the Camaro is made in Canada and the Commodore is made locally.

What's unclear in Ford's plans is whether the Falcon can be sold in high enough numbers to justify local manufacturing.

Burela says the Ford Australia factory is viable at 55,000 units annually (its production volume last year). "But remember, by 2015 the market will have probably grown to 1.2 to 1.3 million units by then. So if we maintain a 10 to 11 per cent share of the total market, our numbers will grow."

Burela said he would rather be competing in a large-car market where there were just two main rivals competing for 100,000 annual sales, rather than in the small-car class where there are 22 brands competing for 200,000 sales.

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