What’s the cost of prof­itabil­ity?

Herald Sun - Motoring - - Cars Guide Confidential - Twit­ter: @RTMBlack­burn

THINGS are go­ing pear­shaped for the Blue Oval.

In June, Aus­tralians bought more new cars than in any sin­gle month in history, yet Ford sales were down by 17 per cent. Year-to-date, the slide is even worse.

There isn’t a ma­jor brand that is los­ing mar­ket share at the same rate. Or one that has slipped in share for as long as Ford. Sales have been in de­cline for more than a decade.

In 2004, more than 135,000 Aus­tralians bought new Fords. This year, it’s on track to be roughly half that num­ber.

And that’s only half the story. Look more closely at the fig­ures and the pic­ture is bleak for the brand that twenty years ago topped the sales charts.

Ev­ery­body as­sumes the sales slump is tied to the im­pend­ing death of the lo­cally-made Fal­con and Ter­ri­tory, but the com­pany’s lo­cal prod­ucts aren’t the big­gest prob­lem.

Sales of lo­cally-made Fords are down 9.5 per cent yearto-date. Com­pare that with the im­ported Mon­deo (down by al­most 60 per cent), Fo­cus (down 54 per cent) and Fi­esta (down 32 per cent).

Which makes this week’s de­ci­sion to drop the cheap­est model from the Fo­cus line-up all the more puz­zling. How will sales im­prove when the brand has trimmed its line-up in the big­gest seg­ment of the mar­ket?

There are promis­ing prod­ucts on the hori­zon, with Ever­est and Mus­tang due this year, but prod­ucts aren’t Ford’s prob­lem. Fi­esta, Fo­cus and Mon­deo are all cars most brands would love in their line-up, but the Ranger is the only one that sells.

Ford used to be la­belled the Fal­con car com­pany. It’s now in dan­ger of be­com­ing the Ranger car com­pany.

Ford says mar­ket share isn’t ev­ery­thing and it is build­ing a prof­itable busi­ness. But surely there’s a point when the show­room traf­fic slows to a level where profit suf­fers?

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