Ford looks to happier times

FORD Australia has admitted that 2006 was a "humbling year", but it expects more stability in the large car segment in 2007.

On the back of a shift from large cars and medium SUVs to smaller, more fuel-efficient vehicles, Ford’s chief, Tom Gorman, admitted that the company had done its ’07 forecast "and we took the business below that".

"If the market turns out to be what we think it will be, we will have to work some overtime."The company wants to avoid having to take any down days, which Mr Gorman said distrupts the manufacturing rhythm.

"It’s not good for the supply base. We had a handful of them this year and it was a pain."If large car sales pick up the company’s Broadmeadows plant can ramp up production through overtime. Currently Ford is building 640 Falcons and Territorys a day.

Although the Falcon has had a flat year, the company’s market leading Territory range has performed well with the Turbo and Ghia Turbo managing around 175 sales a month.

"The model mix is incredibly rich," Mr Gorman said.

Ford expects the medium SUV segment to recover from about six per cent of the market last year to between 6.5 per cent and seven per cent in 2007, while the large car segment should make up 13.5 per cent of the total market.

While a turbo-diesel Territory is still some way off, it is expected to arrive towards the end of the first-generation vehicle's model cycle. The Territory has been on sale now since June 2004.

Mr Gorman hopes the more stable new car environment will benefit all local large car players as 2006 saw buyers swing away from the big sixes to smaller cars due mainly to volatile petrol prices.

In October, Ford announced a 20 per cent cut in production, the company reducing its workforce by 12 per cent — less than 700 people out of 5500 — through voluntary redundancies.

Mr Gorman has forecast that the 2007 market will ease to about 965,000 vehicles, which will still be a good year.

Although the Territory was managing well, Mr Gorman admitted that the challenge was to "get the message out about the Falcon" which has another 18 months to run before a new-generation car is introduced.

The Falcon is now a generation behind the Commodore and Aurion.

"The Falcon is going to be a challenge from a marketing point of view," Mr Gorman said.

"We have a great product but the pressure will be on us.

"I’m confident our team is up to that challenge."Of Ford’s small car segment, Mr Gorman said sales had grown last year – Focus volumes were up 65 per cent – but the company needed to maintain its light and small car message, which also includes the Fiesta range.

It is known that Ford is looking at expanding the Fiesta and Focus line-up, with the possible addition of a Focus turbo-diesel to complement the arrival of the Focus Cabrio late this year.

A hot 2.0-litre Fiesta is also in the wings, although Ford is continuing to play down any performance move for the Fiesta. However, GoAuto understands the company has registered the XR4 name, which would work well with the company’s performance variants – XR5, XR6 and XR8.

Ford’s 2007 confidence comes on the back of media reports this week that the four major car manufacturers have asked the Howard Government to freeze tariffs at 10 per cent and pump a further $1 billion into the industry as it struggles to maintain viability.

The strong Aussie dollar and high petrol prices have also dented confidence in local manufacturing as all four car-makers - Ford, Holden, Toyota and Mitsubishi – have pinned their hopes on big sixes when the market is showing a strong preference for smaller, more economical fours.

Toyota is the one manufacturer that has a dual four and six-cylinder policy, having made the Camry a dedicated four-cylinder while leaving the new Aurion as a V6.

The Industry Minister, Ian Macfarlane, has voiced government concern over the local industry’s viability, which has seen domestic sales slip from 70 per cent of the market in 1998 to just 20 per cent this year.

Mr Macfarlane is preparing a new industry policy blueprint to be unveiled next year.

The fact that the local car-makers have gone, cap-in-hand, to the government on the back of monies already handed out under the industry assistance given under the ACIS scheme, has not gone down well with Canberra.

ACIS has so far delivered more than $3.2 billion in industry assistance since 2001. It will provide around $600 million in funding this year.