What’s the cost of profitability?
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?