Market Insight: Ford’s family feud

CONVERGING sales of Ford’s best-selling models in Australia over the last year has produced a fascinating four-way fight to be the Blue Oval’s dominant brand – a title that was once the unchallenged domain of the Falcon.

While Falcon remains at number one – at least when Falcon Ute sales are included – its crown appears ready to be snatched by one of three intra-stable upstarts.

While the Falcon-derived Territory SUV has come close with the introduction of a new model, it has dutifully remained in the shadow of its locally manufactured sibling, but the Focus small car has shown no respect for the heavyweight champion in the blue corner.

In January – the traditional month of rest for fleet buyers – Focus sales surpassed those of Falcon sedan and ute combined, and it is only the addition of the Ute that has kept the Falcon badge ahead year-to-date.

However, the Ford family feud could be settled in favour of the bolter in the pack – the Ranger pick-up – which may not be built out at Broadmeadows but was at least engineered and developed there.

Supplies have only recently returned to normal after the plant shutdowns in Thailand after the devastating floods there, so Ford is finally able to press hard with the all-new model and is pushing stock into dealerships as we speak to satisfy considerable back orders.

From top: Ford Falcon Ute, Territory, Ranger and Focus.

May looks set to become the month when combined Ranger 4x2 and 4x4 sales surpass those of Falcon sedan and ute combined for the first time.

That might not please Ford’s thousands of embattled production-line workers who precariously depend on Falcon and Territory for their livelihoods, but a sales victory to Ranger will surely provoke a small celebration within the nearby Ford Australia offices where hundreds of designers and engineers worked on creating the global pick-up.

As supply recovered last month, Ranger drew closer to Falcon than it has ever managed, falling just 245 units short – its best result since last year’s end-of-financial-year sale that saw the run-out Ranger post 2148 sales to Falcon’s 2511 in June.

Another result like that for Ranger in May or June will almost certainly put it ahead of Falcon, which appears to be a lame duck that Ford appears unable to fix.

Falcon sales have spiralled down uncontrollably in recent years. Only seven years ago, Falcon sedan/ute sales regularly topped 7000 units a month, whereas last month it managed fewer than 1500.

Focus has been the focus of attention this year after comfortably beating Falcon in January. It also leads Falcon year-to-date if you take out Ute sales, but the small car’s time in the sun may have passed with summer, when retail action on the entry-level Ambiente model appears to have artificially boosted sales.

In April, Focus sales returned to pre-summer levels – down form 1500-plus in the previous four months to only 1105 – so its chances of taking Falcon’s mantel appear to have fallen with the temperatures.

That said, the company is continuing to promote the small car heavily in high-profile sales and marketing activities, such in a sponsorship role on top-rating television programs.

The wild card in the pack for Focus is Thai production, which commences in the second half of this year and should result in significantly lower landed costs in Australia.

If Ford Australia passes that on in the form of lower retail prices, the highly acclaimed small car could make a late charge in the showroom. And a spike in petrol prices could really play into the hands of Focus.

Ford Australia chief financial officer Mark Rearick said this week that moving Focus production to Thailand would bring several key benefits.

“We expect that to be in the long run a much lower-cost operating base for us, and that will allow us to continue to build on Focus,” he said. “We certainly have healthy margins now, but that shift will allow it to become even more competitive.

“Shortening down the supply chain by moving to Thailand makes it basically a two-week boat ride for the vehicles to arrive, and that is going to allow us to be a lot more reactive to changes in the marketplace, including series and powertrain-type items.”

While Focus, Ranger and Territory are facing up to the Falcon, sales of the Fiesta light car have been bubbling along nicely for Ford since cracking the 1000 monthly sales barrier for the first time in early 2010. Fiesta has averaged 928 units a month for the past year with a high of 1203 in September.

The mid-size Mondeo has been a consistent performer for Ford, but is a distant sixth in its model line-up, averaging just 492 sales a month in the past year.

Ford remains upbeat – at least publicly – about Falcon’s prospects following the recent release of the four-cylinder turbocharged EcoBoost which Ford says should grab back some government and fleet business with its green credentials.

Not even those at Ford with blue blood coursing through their veins believe the old warhorse can win this battle. It’s just a matter of who will be the new king, and when.