Ford to re-Focus
BY DAVID HASSALL | 18th Aug 2008
Ford Australia president Bill Osborne said last week that the revised model line-up would be introduced at the same time as the 2009 mid-life facelift.
He said that the company's new vice-president of sales and marketing director, Beth Donovan – who starts work at Broadmeadows on September 1 after heading up global small car marketing and planning in the US – was the ideal person to achieve his aim of improving Ford's small car sales in Australia.
Although Focus sales in July rose by 14.9 per cent on the same month in 2007, they are down by 6.0 per cent year-to-date on the same period last year.
Mr Osborne said that, where rival brands offered three or four models, Ford has six in the Focus range (CL, LX, Zetec, TDCi, Ghia and XR5) and cited the entry-level CL, which comes in three versions, each with the choice of two transmissions, as an example of the added model complexity he says afflicts his struggling small car.
“We've got a lot of complexity in our [Focus] line-up, so we haven't had what I would call a focus on a high-volume model,” said Mr Osborne. “We need to narrow our focus and get a few high-volume models that we leverage.
“When you have this kind of complexity, it tends to create stock problems around the country, because every dealer is ordering something different. There's no alignment on the advertising ... there are a lot of issues created with complexity.
“The other problem for us is Focus has a lot of Euro [currency] exposure in it and, when the Euro continues to strengthen and the Aussie dollar doesn't keep up, it creates margin pressure for us. It makes it very difficult for us to be competitive.
“That's a key reason why we made what I think is a pretty courageous decision to manufacture small cars here in Australia. That Euro exposure is definitely an issue for us.
“Frankly, if you look at Focus in private [sales] versus non-private, we do fairly well in the private side. Because of those margin pressures, we are not nearly as competitive on the fleet side of the business. We expect that manufacturing Focus here will make us a lot more competitive on the fleet side of the business.” In the meantime, Mr Osborne is looking at a retail offensive designed to achieve volume sales at a higher price point than the base model.
“We've yet to find the right recipe to break out of the pack, so we're going to try a few different things. One of the things we think is going to be important is perhaps to highlight a more attractive vehicle in our offers. Right now we're at $20,490 driveaway, but that's on a CL model, an entry-level model. We think it's worth trying a more attractive model.
“We're looking at some special value packs, but I think in terms of driving more volumes we've got to narrow our model range and get a higher-volume, more attractive vehicle – perhaps even at a higher price point.
“Customers are moving down into small cars, but they're taking their large-car expectations on features, content and value with them. That may have to be the focus of our advertising.” Ford is also acting to revive sales of its acclaimed but underperforming Mondeo medium car, which has dropped from a 9.8 per cent market share in May – its first full month on sale – to 5.4 per cent in July.
The company is now offering cruise control, 16-inch alloy wheels, a leather-bound steering wheel and electric rear windows – normally offered in a pack for $1500 – at no extra cost during August and September.
And Ford Australia president Bill Osborne told the media last week that the company had also introduced an eight per cent fleet discount across the range to make the Mondeo attractive to businesses and especially governments.
Mr Osborne said that the recent price cuts of up to $3920 on the Mazda6 range as well as a feature realignment on the new Honda Accord Euro (which he estimated was worth about $2000) had hurt Ford, “so we had to respond in kind”.
“Mondeo was a big disappointment for Ford (in July). We missed our sales objectives by a large margin (but) we hope to recover those sales in August due to a more aggressive competitive position.
“One other slight change in our Mondeo strategy is that we are now looking to do some selective fleet business with Mondeo whereas before we tended to make Mondeo a pure retail proposition.
“We are now expanding the opportunity to do more Mondeo business in fleets and we have announced modest national fleet discounts of eight per cent across the range.”
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