FTE becomes FPV - but have they learnt? - Ford Forums - Mustang Forum, Ford Trucks, Ford Focus and Ford Cars

russellw · 03-27-2003, 02:20

More a rhetorical question than anything else ... and a continuation of my views on the FTE "bold experiment".

I left off in that thread with the comment that time alone will tell whether the "misjudgements" of the past will be repeated. I want to theorise about that possibility a little more. (Usual disclaimer).

Point 1
Let's start with the (now) infamous Mustang Cobra exercise. From my really simplistic point of view this suffered two problems. Over pricing and over supply. There was undoubtedly a niche market for that type of product but this was very quickly fulfilled in the first couple of dozen sales. Since then it has been a long and slow road to move the remaining (large) quantity from dealer stocks or Ford holding yards. Substantial "bonuses" have helped them move but further disenfranchised those poor individuals who paid top whack.

Now logic would dictate that is an expensive mistake that wouldn't be repeated ... or would it?

I posted a thread a while ago looking at the Focus ST170 and it's natural competition. This is another niche vehicle that will sell in an already crowded segment full of really good product and presently dominated by the Renault Clio Sport. In that thread I suggested that the ST170 would need to be priced competitively with that vehicle to have a reasonable chance. Now if I was sitting in the big chair at FPV (and no David I don't want it) I would be bringing in a very small number to test the water. I know that's easy for me to say as I am taking the simplistic approach - nor do I wish to disparage the excellent efforts of the FPV team but ......
Excuse my cynicism but let us hope that they arrive in relatively small numbers and at a market competitive price otherwise we will see a repeat of history.

Point 2
I know this is long and probably boring but that's just me.
The other area of concern is the treatment of the premium vehicle range. In the FTE days that was the T-Series and now under FPV it is the GT/GT-p/Pursuit range of vehicles. Excellent cars (as were the T-Series) and very well priced it would seem the future for the buyers of these cars is bright .... but perhaps not??

The key issue for me with the T-Series of vehicles was the steps that Ford took to devalue and disenfranchise the owners of the early models as they progressed thropugh each series. I won't repeat what I said in the other thread as I guess you have the idea by now. So could this happen again?

There is always a drive from manufacturers for continuous improvement in the model cycles - this is natural and meets the demands of new customers. However, when these changes between series are substantial there is always potential for a negative impact on the residual value of the vehicle replaced. This clearly happened with T-Series.

So could we see a repeat for the FPV-GT range?
Possibly.
Something like the rumoured FPV Turbo could have an impact. Or a significantly improved BAII GT range that came with more power, significantly less weight and/or something like the (also rumoured) 6 speed gearbox (or 5 speed auto). Indeed any substantial value added benefit that wasn't reflected in a similar change in pricing would have the potential to disenfranchise a whole new set of owners.

Anyway - these are just the mumblings of an old man.
Ford don't have a stranglehold on this process either although Holden have managed to not do it very often by running their major improvements in 3 year cycles. The exception in their case was the introduction of the LS1 that caused some grief for onwers of the last 5.0 cars.
Saab and Volkswagen did it too (by reducing the price of the replacement model) but to their credit they refunded the earlier buyers the difference.

Enough from me
Cheers
Russ

mattyc · 03-27-2003, 02:47

Quote:

Originally posted by russellw

The key issue for me with the T-Series of vehicles was the steps that Ford took to devalue and disenfranchise the owners of the early models as they progressed thropugh each series. I won't repeat what I said in the other thread as I guess you have the idea by now. So could this happen again?

A good point indeed - and im sure those that pay attention to details like youself are left wondering why they paid their premium to have their cars become one of the pack.

Casting our minds back - remember what happened when Holden did put the LS1 on the market? Old SS,Clubsport, and other "premium" brand HSV's also became really second hand - and if it wernt for their "MARKETING PROWESS" and HSV's brand, im sure the two of them would probably be in the same resale boat.

THE FTE vehicals IMO were targeted perfectly agaist their 5ltr companions from HSV. Shortly there after, the LS1 hit and everything changed.

svtang · 03-27-2003, 02:59

recently I contacted FPV regarding the pricing of Mustangs.... this is their response (inpart and I quote WORD FOR WORD)

"We were wanting to advise you that any vehicle being sold as demo model is classed as a used vehicle, each dealer is able to sell used/demo model vehicles for whatever price they see fit. We are unable to regulate used or demo model vehicle pricing as it is against the Trade Practices Act.

If you look at the Ford website www.ford.comn.au the RRP for a new Mustang convertible is $89,000.00 plus on road costs, this price has not changed since we originally bought this model to Australia.

In relation to bonuses, we do provide the dealers with margins and incentives but these are only available on new vehicles not used or demo model vehicles. So any incentives provided would not be available on the vehicle that you have recently seen at the dealer.

We are aware that vehicles do depreciate, however with the Mustang, although there may be an initial depreciation we believe that they will hold their value in the long term.

We obviously appreciate your loyalty to Ford and to your dealer, by no means have we intentionally tried to undercut the value of your vehicle in fact we have not altered the RRP of the Mustang, and as we have advised we can not stop the dealers selling demo models at a reduced price. I do not have any figures on demo models that are left however we can advise you that we have 9 new convertibles left Australia wide, these vehicles will continue to be sold at the RRP."

What FORD FPV failed to mention is that when a dealer "buys" a car to demo and consequently sell at "whatever" price, it is that the Ford incentives/bonuses/whatever go to the dealer.

With this money in his pocket, the dealer sells the car at the greatly reduced cost just to clear it.

DEVALUATION IN ITS PUREST FORM

IF YOU ARE CONFUSED - JOIN THE QUEUE - read the quote again

The Mustang Cobra has probably been the worst and most obvious balls up in marketing by Ford (with many others coming a close second).

To finish this post off .. Ford/FPV seem to longer wish to respond to my emails and phone calls regarding this issue.....

Maybe I'm a nutter, a nuisance or the truth ...

FORD - do not bite the hand that feed you ... and
FORD - there are alternative marketing proceedures .... and
FORD - maybe listen to Russ or me or those like us...

the mumblings of another old man
... Rob

XF 5.0 S · 03-27-2003, 15:16

Its nice to be the first kid on the block with his/her brand new toy, gotta have it now, right? Dealers / manufacturers smell this desperation which is reflected in the pricing of new so called cult cars. The marketing sucks you in - and hey presto - you are having an orgasmic Tickford "experience" ....Pffft.

Always has been this way, and unfortunately always will be.

Cars will always depreciate.

The only benefit in loss of value is to have the car owned as a company car, and write off it's depreciation as an expense against income in the purest company sense.

People who buy these cars new with money out of their own pockets for personal use will always lose, percentage losses can be argued but at the end of the day its always going to be a loss, no matter what the vehicle. Cars are bad debt . Add to that the interest cost if you borrow to buy and you see what I mean. I learned the hard & expensive way when I used to have the "me too" mentality.

Personally, I would wait until the car was 1 - 3 years old and capitalise on the loss in value from the previous owner at a saving of 30 - 60% on new car value (depending on the vehicle) - but thats just me, its not the law of the universe.

The saving I would make would go into pissing off a home mortgage, or better still buying more property (but hey , thats just me again)

Is the TS , TE or T3 any lesser car than it was when it was new?
How about a mustang demo with 5k on the clock?

My point is to sit back and wait & see before handing out the hard earned. I know I sound like an opportunistic capitalist, but hey - I feel comfortable with that..I learned the hard and expensive way.

JC-XR8 · 03-27-2003, 16:52

The only problem with that is that you need new cars to be bought and subsequently sold before your option becomes reality. As the demand for new cars decreases, the price of used cars increase, closing the gap to new car prices (relatively), which eventually pushes people to buy a new car. Either that or the local car industry dies and we are left with ONLY imported choices.

XF 5.0 S · 03-27-2003, 17:04

Quote:

Originally posted by JCV8
The only problem with that is that you need new cars to be bought and subsequently sold before your option becomes reality. As the demand for new cars decreases, the price of used cars increase, closing the gap to new car prices (relatively), which eventually pushes people to buy a new car. Either that or the local car industry dies and we are left with ONLY imported choices.

Agreed - but in reality it will never happen....

Ego, image, Marketing, Me Too, keeping up with the jones', etc will ensure that new car will always be sold in this country at high levels as they are.

The local industry will never die, and there will always be demand for new car product.

The sellers will be:

Ex Co. cars (for various reasons)
Repossessions (for various reasons)
"Me too" wanting to update
expired leases
etc etc...

RAPTOR · 03-27-2003, 17:18

Sounds to me like Ford was damned-if-it-did or damned-if-it didn't.

Would we have ever seen the Mustang if GMH didn't have the Monaro? I don't think so.

Ford needed a response.
It could have built it's own 2-door (300+?) but AU sales didn't put the balance sheet where it needed to be to fund that sort of exercise. So the option to import the Mustang was taken. This had image and the runs on the board (also gets everyone at FPV familiar with the modular V8's), so it seems like a sensible alternative. Then you have to finance not only the import but changes to meet ADR's. Better bring in enough volume so the slug per car isn't too high but don't want to lose exclusivity so you pick a number. Still a fair slug per car but hopefully you'll still be able to move them.

In hindsight maybe they got that wrong, or maybe the public were never going to warm to an import, even from the USA.

As for the original T-series I loved the concept. No it didn't match HSV in the numbers game but Ford gambled that the public wanted more than that and that this wasn't the be-all and end-all of the market. Seems like it is. If you don't have the numbers and the flashy (trashy?) looks you don't get a look in no matter how good the rest of the package. Then there is the AU factor to consider - would people have bought it anyway - it was still an AU.

So the public demands more stick at a lower price to match (or better) the opposition. Ford deliver but inevitably at the expense of the earlier buyers.

Is that really a problem?

Weren't the ones that bought these cars going to be dyed-in-the-wool Ford supporters that would always buy the product regardless.

You can't expect to be buying premium spec models of what are in reality everthing from taxi's to utes to limo's and expect them not to depreciate big-time. Get over it. Buying these things isn't a financial investment.

250 PURSUIT · 03-27-2003, 17:53

Gents,

Well said, i would have to agree with all of you on this topic.

Bluedriver · 03-27-2003, 18:09

So true XF 5.0 S and well said Raptor......
My brother in-law told me long ago my cars have been an extension of my P>>>s !!! So true, always costed me $$$ he he he.

I took advantage just on the BA release, bought my XR8 S3 with rebel kit for a song compared to buying it earlier in ' 02.
I really enjoy it and no probs for now ( touch wood ), my only regret is if I held off till into the new year I'd be in a " T " instead grrrrrrr...........
Depreciation in large chunks is inevitable especially with Ford/Holden and even worse Magna.
Like XF 5.0S if you can be an opportunistic capitalist it's the way to go !!!!

Falchoon · 03-27-2003, 18:12

Quote:

Originally posted by RAPTOR

As for the original T-series I loved the concept. No it didn't match HSV in the numbers game but Ford gambled that the public wanted more than that and that this wasn't the be-all and end-all of the market. Seems like it is. If you don't have the numbers and the flashy (trashy?) looks you don't get a look in no matter how good the rest of the package.

Not wanting to to start a flame fest here but has Ford/FTE/FPV really learnt this lesson yet? See previous threads on BA XR8 and GT performance.