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Old 10-11-2002, 21:46   #1 (permalink)
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So where to now??

Ok - just some random thoughts for a quiet Saturday afternoon.

The BA range of product has been met with a good reception by the majority of the motoring press and appears to offer something for almost everyone. It is a great start.

All in all this should bode well for the future of Ford Ausralia but there are still a couple of concerns in my view.

1. Sticker Shock. I guess we all know that the AU has hardly set the world on fire for resale values - I would warrant that an AU1 Forte is worth roughly the same as a 2nd hand vacuum cleaner and for much the same reason. Unfortunately this has also rubbed off on the rest of the AU range even though it probably doesn't deserve to be tarnished with the same brush. The overall effect of this is 3 year resale values in the 35-45% range for most AU product which compares unfavourably with the 50-65% of the major competition.
While on the sad topic of resale values lets see what else in the Ford range is suffering -

Cougar - actually held up ok for awhile but since the last of them got to be impossible to move even new ones are going out the door at a 20% discount to new car price. Obviously this will impact the resale value of the remainder which are probably sitting it at around the 40% mark at 3 years.

Mustang - probably the saddest story of the lot. Also being heavily discounted at the moment in an attempt to clear the (large) remainder (about 28% off) I would predict a 3 year resale in the order of 40% at best.

kA - thankfully it was reasonably cheap because these aren't looking too flash either. Present pricing is about 25% off the list so 3 years aren't going to be too flash either.

Mondeo - let's not even go there.

Fairlane - (after he picks himself off the floor from laughing) - last I heard these were considerably cheaper than a Fairmont Ghia - pity the poor bastard that paid full tote for one.

All this really means is that the people who choose to migrate into a new BA vehicle are going to find themselves facing a big jump to fund the new car. This will present something of a barrier to the success potential of the BA in the initial sales period at least. I don't have any answers for this but I do know it has got to stop sooner or later.

While I am on the subject (and I am sorry for digressing a bit) I hope that Ford somehow manages to get a greater degree of control over it's dealer network. I don't want to get into another bun fight over what it is that leads to poor resale values but I do know that dealers who discount for volume do not help the situation. Before someone says it I do know that these are independent businesses but the carousel has to stop somewhere.

Not that all of the blame is with the dealer network either. The whole vexed issue of what gets built and the model mix is another major contributing factor. At the moment we have a classic example with the T3 model mix - as far as I know there are bugger all TE50's left and a fair few TS50's because the mix was not what the market wanted. I understand it is a complex issue but surely the whole JIT thing is now sophisticated enough to run a build to order system rather than rely on guess work, tea leaf reading or Tarot cards to establish market demand. I would have thought it was possible to fill the production schedule with dealer stock builds and just concentrate on BTO. But then I am probably oversimplifying the issues as usual.
While on the BTO topic: I made a similar comment with regard to FPV product but I guess that won't happen either from what I can see. I just hope that (a) they don't build more than demand and (b) they get the model mix right or we are going to see histroy repeat itself.

Either way these sort of issues have got to be dealt with for the BA range to reach their full potential.

2. My second point has to do with the rest of the model range outside of the BA. One of the corenerstones to the dark side success has been the overall strength of the entire product range as witnessed by the monthly sales figures that show Holden product performing strongly in almost every category.
Without oversimplifying again this achieves two things for Holden. Firstly it aids profitability and secondly it gets younger people into the Holden family via Barina, Astra and Vectra and provides a migration through the range for them.
So how do Ford compare at the moment?

Well we know the kA runs about last in the market segment some 1300 units a month behind Barina. Sells about as well as white flags in Beirut.
Laser / Focus have been strong sellers but still well behind although the Focus is a good product and will undoubtedly win back some of the gap from Holden.
The Mondeo - don't even know if it still exists?? Does anyone even care??
The Cougar - a dead duck (sadly).
The Mustang - an interesting experiment gone horribly wrong. Must be giving someone nightmares assuming they are still employed.
The Escape - holding its own in a competitive segment.

All in all a tough assignment. Again I don't have answers but I bloody hope someone in the glass house does.

3. Finally we reach the last element in the whole equation and that is the race track. As far as the enthusiast and semi enthusiast market is concerned this is still an important element. It may not be win on Sunday, sell on Monday these days but a pattern of extended losses will certainly not create desire for the losing vehicle. This whole racing thing impacts most on the younger pre-vehicle ownership people who will aspire to the car that they see winning on the race track. That element has never changed but we certainly have some ground to make up in that area. Until the kids WANT to go out and buy an EA/EB instead of a VH/VN then we are still losing the hearts and minds battle. Aspirational products like the GT range are a step in the right direction but it would be foolish of us to forget that the legendary status afforded to GT was based on the race success it achieved as much as anything else.


Conclusion:

These are just some of the challenges ahead for Ford and their partners.
Before I get flamed to death let me say that I have confidence that there are people attempting to deal with these issues. I am not doubting the committment of the race teams, engineers and management at Ford and certainly the proof of their efforts so far has been excellent.

Cheers'

Russ
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Old 10-11-2002, 23:12   #2 (permalink)
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Do you have sore typing fingers Russ?
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Old 10-12-2002, 02:20   #3 (permalink)
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I can''t dissagree with any of that. Humph.
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Old 10-12-2002, 02:47   #4 (permalink)
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The Mondeo - don't even know if it still exists?? Does anyone even care??


I CARE :(
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Old 10-12-2002, 03:00   #5 (permalink)
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I care about the Mondeo, I used to own a 98 manual Zetec and I loved that car alot... multiple car of the year winner in Europe, and the current one looks great. Too bad we wont see it in Australia.
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Old 10-12-2002, 03:21   #6 (permalink)
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what are the current figures for the F-series ? becuase i see oodles of these around the traps and they all arent the same car either good mixture of 250's and 350's
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Old 10-12-2002, 03:46   #7 (permalink)
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Interesting points there Russ, I totally agree on the resale value aspect and i guess Fords model range will be sorted over the next few years. Though i guess it's fair to say the AUII/III while still not exactly as good as the riverls is a big improvement over AU1.

In regards to model line up i think the back bone for Ford Aus will no doubt be the BA and the up comming project of EA 265 to get new sales.

Mustang will be replaced with the GT and GT-P models. Focus looks like a stronge package and i can't help but think if the BA suceeds so will the Focus as peope will trust the brand. Ie a person that has a BA company car and is happy with it would no doubt look for a Focus for his partner as a private car.

The KA is a disaster, perhaps Ford should look at Fiesta as a replacement.

Next thing in the meantime to watchout for is the new fairlane/LTD, i'm hoping they regain the luxo market from the Statesman/Caprise.
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Old 10-12-2002, 03:49   #8 (permalink)
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I was very critical to begin with about Ford Australia taking the line of not competing in the C/D segment but looking over VFacts figures I think they made the right decision in the end.

No matter how good the Mondeo is it wouldn't have justified getting the car here to compete in a segment that is shrinking.
Vectra sales last month were 67 units and the Camry is simply too tough to seriously challenge, not to mention Ford's Mazda already has a vehicle in the segment.
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Old 10-12-2002, 03:54   #9 (permalink)
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Quote:
Originally posted by XR_Strider_GuY
The KA is a disaster, perhaps Ford should look at Fiesta as a replacement.
The Fiesta's coming :)
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Old 10-12-2002, 08:23   #10 (permalink)
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Firstly - the current vectra is being run out (I think I read somewhere that there were only about 200 left in yards in oz), with the new (and apparently much improved) model not due for a couple of months. 96 sales is hardly indicative.

Secondly - new mondeo has won nearly every comparison I've read in euro magazines - against competition like the new Vectra, Renault Laguna etc. Previous Mondeo failed because of no marketing and poor R & D for local conditions. Holden put the R & D money in for vectra and got the results. It's not a huge market segment, but Holden do OK out of it. Let's not make excuses - Ford could have done so too if they'd only put the time and effort in that Holden did, and we might not have the situation we do now - where we'll never see cars like the gorgeous ST220 Mondeo on our shores.

As a blue oval fan, it's great to see Ford once again with some bragging rights (Welcome back GT, bring on HO), but Holden has shown that not only do you need to take some risks to get some return, but that you cannot just take a car off European roads, bring it over on a ship and expect it to sell over here with crappy suspension set-ups and engines with no torque...
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