article from Carpoint

[JPFS1]

Here's an article from carpoint that may interest some.

COMMENT: FORD'S MARKETSHARE DILEMMA

By CarPoint's Joe Kenwright

It was probably Ford Australia President Tom Gorman's toughest media briefing since he took up the reins on March 1, 2004. Last Monday (August 15) Gorman announced the details of arguably the best and most advanced family car range ever produced in Australia along with similar improvements to the best-selling Territory SUV. Yet there he was also having to explain why Ford's market share in the last two months dropped below the worst of the bleak AU years. Although Ford's May profit announcement was the highest since 1996 and was a 20 per cent improvement over the previous year, it is no secret that Ford Australia is not happy about its trailing third spot on the sales ladder.

Ford deserves better when it is now offering the most cohesive and consistently good model range at all levels. So where have the sales gone and what does it mean for buyers?

As Gorman pointed out, the combined Light Car (Toyota Echo, Holden Barina, etc) and Small Car Segments (Toyota Corolla, Holden Astra, etc) lifted to a whopping 31.2 per cent of local sales in July. The Medium Car segment (Mazda 6, Honda Accord Euro) has lifted steadily from 4.7 per cent in 2002 to 5.3 per cent year to date. That means that (predominately) four-cylinder passenger cars now account for almost 37 per cent of total local sales. And this at a time that Australian Large Cars have dropped to 16.1 per cent year to date in May then dropped further into the 15 per cent range in June and July. As recently as 1996, the Australian Large car segment on its own dominated the market at 30.6 per cent. When Ford shared most of that segment with Holden, it made a big player of both companies.

The other growth segment is the SUV Market which has grown from a tiny 7.7 per cent in 1996 to a level of around 18.5 per cent today with occasional spurts into the 20 per cent range. Ford has capitalized on this growth with the Territory but this market continues to steal sales from Large Cars and more buyers are using the opportunity to downsize as they make the switch.

The Koreans are making their presence felt in this SUV market while the Honda CR-V, Subaru Forester, Mitsubishi Outlander and Nissan X-Trail are providing real alternatives with their modest increases in size and performance over this type of vehicle five years ago.

The other big growth area is the Light Truck segment where utes in twin-cab configuration appear to be stealing passenger car sales while the two-door Aussie ute has become the new sports-recreational vehicle for young drivers and the young at heart. Ford has done well to capture much of this growth but lately it is the new Japanese models that are doing some real damage as most take advantage of their duty free Thai-sourcing. Light Trucks now account for over 17 per cent of sales from a low of 13.1 per cent in 1997.

Combine the sales of the Light Truck and SUVs (which include traditional 4X4 and AWD crossovers) and over 35 per cent of the total Australian market is no longer driven by passenger cars.

That means that much of the total market is split evenly between small/medium cars and utilitarian vehicles - leaving Australia's four manufacturers desperate to convince you that the best alternative within that remaining 30 per cent is an Australian large car.

If the local builders are to enjoy a profitable future (and therefore continue to build Down Under they need to win back some of the ground lost to the other segments. This explains the huge amount of money Ford has spent on winning fuel economy gains in its BF Falcon range. Yet this might only be enough to maintain sales at current levels especially after the new Mitsubishi 380 and VE Commodore arrive.

So where does this leave Ford?

You can't expect to be running at number seven in Light Car sales (with the Fiesta) and expect a place on the podium. The Fiesta has been critically acclaimed, however, things will likely get worse (in terms of competition for sales) as Holden switches from its European Barina to a cheaper-to-produce Korean substitute.

Ford walked away from its Asian-sourced Festiva to chase European quality but now might be forced to yield a little on price to get Fiesta top of mind with buyers. We'd argue Fiesta is worth a premium but Ford has still to get that message across to buyers.

In the Small Car segment, the Focus has been the biggest tragedy. After bungling the transition from Laser to Focus, Ford finally got the Focus to the point it generates some of the highest owner satisfaction ratings in this segment. Because Ford did not anticipate the strength of this turnaround, it ran out of superseded Focus stock before the new one arrived.

In an agonizing two month wait, the Focus nameplate lost hard won momentum then regained it with strong approval for the new model, except Ford ran out of stock again. The South African sourcing which generates its competitive $20,990 entry pricing is struggling. Frustratingly, unprecedented demand in its home market means Aussie buyers are having to wait.

It is a repeat of the situation that Mazda found itself in with the Mazda 3 last year. The new Focus has generated such high interest it will take time to catch up. If the Mazda 3 is an indicator, the new Focus will have rock solid resale for at least a year or two -- if you can get one.

Ford needs to rectify this quickly as Holden responds with a two-tiered Small Car attack later this year with its European Astra range dominating the over $20,000 bracket and a new under $20,000 Korean Viva range to mop up the stragglers.

Gorman was not saying much about rectifying the Focus supply problems but adding a European supply line is a real possibility. If Ford goes down this track, the Ford Focus wagon and three-door hatch could reach the Australian market much sooner than expected.

To be given a real choice between two sophisticated European wagons (Focus and Astra) in the low $20,000 range would be a huge win for Australian budget and fuel conscious buyers.

Ford could choose to roll out some Focus models with Volvo-sourced five-cylinder turbo power under the XR5 badge. These could be good enough to knock out some of the heavy hitters in the medium segment. Mind you, it will need to be quick on its feet as Holden is expected to chase the same with new Astra performance models.

The Ford Escape is not fulfilling expectations. The 2.3lt four was a start but expect further action here. The Ford Territory cannot be allowed to lose momentum so the new six-speed auto is being added to the armoury ready for turbo and diesel versions as soon as sales plateau.

The Ford Falcon ute is still a strong seller and gets a real lift from BF improvements. The class-leading RTV version is still overlooked and could benefit from extra marketing. Ford must be looking at a twin cab version when the Holden Crewman is lifting Commodore ute sales. Improvements to the Ford Courier, especially the new V6 versions have turned the model around, but a new diesel is needed desperately. Ford has abandoned the Explorer when dwindling sales can no longer support a RHD version.

And that still leaves the BF Falcon range. Ford let slip that it was a real achievement for the BF Falcon not to gain weight at each level suggesting that each model will be better-equipped.

Ford's BF improvements close the gap on the FPV range which set new records in July. FPV sold 87 Typhoons against 55 GTs and 37 GT-Ps and that was without an auto option for the Typhoon. Ford's new six speed auto will be offered on all FPV BF models which should share similar power increases to the Falcon range across the board. FPV won't be announcing its big changes until the Sydney Motor Show.

Although the story has yet to be told, BF refinement levels were up significantly in the preview cars so Ford is still holding back on what is expected to be another major story on pricing, suspension tune and equipment. This is one contest where readers can expect a development every week from the key players and CarPoint guarantees you a ringside seat.

[Aussie_Geo]

Originally Posted by JEM

Here's an article from carpoint that may interest some.

Ha ha Typhoons rule :

Peter

[HSE2]

Nice find Chris

[Ghiadude]

Originally Posted by HSE2

Nice find Chris

indeed it makes for very interesting reading..

[JPFS1]

What i found particularly interesting also, were the assumptions of similar power increases at FPV in line with the increases on the lower models and the expected 'big changes' come October.

[svo347]

Originally Posted by JEM

What i found particularly interesting also, were the assumptions of similar power increases at FPV in line with the increases on the lower models and the expected 'big changes' come October.

Let us all hope its so........
:

[jmc-007]

From reading that you can see ford is selling quality products where holden will start importing rubbish from korea, how long will this last before people realise they are paying for Daewoo's with holden badges :P

but on the upside Ford has some bloody good cars at the moment. Maybe the just need some more marketing ??

[XR6turbo]

Holden don't need quality to sell cars, they have proven that over the years. There marketing is so strong that no one gives a about the quality it seems. If ford want to sell more cars, they need to market them better. Fords marketing department has been utter crap for many years. They need some fresh idea's to push there products across. Same goes for FPV, there just isn't enough marketing of there products.

[outback_ute]

True, in the "cheapie" end of the market so long as quality is adequate (like all other aspects of the cars) the price and warranty are more important. Perhaps Ford need to build the Fiesta in Thailand?

/off to wash mouth out with soap lol

[Trevor 57]

Fuel prices are having a HUGE impact on all large car sales, inlcuding the Territory & Falcon range. I bet GMHolden are having the same problems

Car sales are all about perception I've learned. Forget quality.

[Bluehoon]

Originally Posted by RATT

Car sales are all about perception I've learned. Forget quality.

True, but how long until the motorshow...??? TOO LONG!

My inner cynnic still says, new auto, new bumper, some extra fluff on the door trim and a new coat of paint. :

And to top the FPV range off, some stiffer monroe shocks...

[HOON69]

nice read..