Ford halts Melbourne Falcon assembly as demand drops off

[vztrt]

Originally Posted by RAREV8

A bad thing happened....Ford are no longer competitive enough with their pricing as after an 8 year run of Falcons as company cars, G6's and Futura's mainly, our company has gone for a bog standard Aurion ATX.
Why? Of course the Falcon is a better car in almost every respect but at 27K each, the ATX won. I blame Ford for making me drive a Toyota.

How hard have Toyota gone to push their cars now. Maybe the company is getting a good deal from them? I know my work is getting 5 new Commodores soon and mainly have had Falcons and Commodores. Only Toyota is a Hilux.

[stang65]

Originally Posted by BENT_8

Have another read mate, unless Ford have snatched a heap of market share from other manufacturers to keep their total sales steady, the buyers arent waiting for the updates, if they were then the over all sales would have declined in anticipation which hasnt happened.
People are still buying new Fords, just not the larger varieties.

AHH MY GRASSHOPPER, you must have faith, everyody has been hurting, have yo got money to go out and buy a brand new car. At least they made money last year unlike holden and they didn`t make 100,000 cars to break even like holden have to..

You think they don`t have meetings to address the market. Just because they have down days to clear stock isn`t the end of the world. Maybe there getting ready for the FG2 maybe there tooling up for ecoboost.Unfortunately neither you or I know the real story but time will tell.

[tezxr8man]

Originally Posted by b0son

you first.

allready in the process dude, gotta put your money where your mouth is
and believe what you say

[prydey]

Originally Posted by RAREV8

Of course the Falcon is a better car in almost every respect but at 27K each, the ATX won.

how much money are toyota making on that sale? no point selling cars for no profit.

[2011G6E]

Originally Posted by SteveJH

Mondeo only has a tow capacity of 1300kg. My parents looked at getting a toe bar on my dads work TDCi mondeo but ended up having to get it put onto the XR6.

The "average person" though will be quite happy with 1300kg towing capacity...if they need more they'll probably be looking at fourbies or stuff like a Territory or falcon in the first place. Our 100 series Landcruiser had a 3600kg towing capacity, but the biggest thing it ever hauled was a little Corolla on a car trailer...once. Normally it was a box trailer or our 14' tinny.

In times of higher fuel prices, the spectre of a carbon tax looming on the horizon, and price, people move towards smaller cars, and seeing as how something like a Mondeo has, realistically, all that maybe 80% of drivers would actually need in the real world, big cars are in trouble. As I said, realistically we could have bought a Mondeo and been quite happy and it would have done everything we need...we bought the G6E because we thought we "deserved it" now that we are financially in a position to afford one easily. If we'd thought more with the head than the heart, there'd be a Mondeo diesel outside in the garage instead of the G6E.

However unfortunately, people who buy "with the heart" don't keep sales figures rolling along enough to keep the company going.

[prydey]

Originally Posted by 2011G6E

In times of higher fuel prices, the spectre of a carbon tax looming on the horizon, and price, people move towards smaller cars,

lots of people, including the media, always bring this up when the large cars aren't selling that well, but fact is, the suv/4wd market is actually the biggest growing market. not exactly a choice of car you'd look at if you were worried about fuel.

[Road_Warrior]

Look, the future for the Falcon - if there is one - is as a niche performance and luxury product. As a niche product it will probably only sell in the numbers it is now. Ecoboost and LPI can take care of fleet stuff but will it be a case of too little too late?

[irish2]

Originally Posted by Road_Warrior

Look, the future for the Falcon - if there is one - is as a niche performance and luxury product. As a niche product it will probably only sell in the numbers it is now. Ecoboost and LPI can take care of fleet stuff but will it be a case of too little too late?

Hence the reason that Mually's 'One Ford' is the only way forward. In this global market I see neither Ford Aus or Holden surviving. Holden produced 57,000 cars last year. They have stated that they need 105,000 to be viable. Cruze is expected to sell about 30,000. That still leaves 15,000-20,000 shortfall in production for GMH. Ford Aus made a profit last year on ~50,000 vehicles.

[prydey]

Originally Posted by irish2

Ford Aus made a profit last year on ~50,000 vehicles.

that doesn't necessarily mean the locally produced stuff made money. it may just mean they made enough money from the imports to cover it.

[jpd80]

It looks like the market has given up on Falcon but no one really
knows if it's temporary or permanent, that's the scary part...

[jpd80]

Originally Posted by prydey

that doesn't necessarily mean the locally produced stuff made money. it may just mean they made enough money from the imports to cover it.

2005 to 2009 Holden lost $574 million

2005 to 2008 Ford lost $240 million

Looks like all those Holden Exports and extra local sales have been losing money for years.


One thing for sure, this will force Ford Australia to act, with declining Falcon sales
in the first two months of 2011, Ford is actually up 1% in sales thanks to the nice
up tick in imported Ford sales, it's as though the market suddenly switched over
from Falcon/Territory to to Fiesta, Focus, Mondeo, old Escape and Ranger.

Maybe the market is trying to tell Ford something very obvious, it's time to move on....

[Road_Warrior]

Originally Posted by irish2

Hence the reason that Mually's 'One Ford' is the only way forward. In this global market I see neither Ford Aus or Holden surviving. Holden produced 57,000 cars last year. They have stated that they need 105,000 to be viable. Cruze is expected to sell about 30,000. That still leaves 15,000-20,000 shortfall in production for GMH. Ford Aus made a profit last year on ~50,000 vehicles.

The big issue for Holden going forward is the same platforms being made overseas. We already know the Cruze is made in Korea, Russia, the US and I think somewhere in Eastern Europe, and CKD versions of the WM Statesman are made in China and South Korea - if the global (or even local) economy goes sour again, why would GM continue to support high-cost manufacturing of an identical platform that is made in low(er) cost countries? Same goes for Toyota and the Camry. At least the Falcon and Territory have the uniqueness in the Ford world so that it is not readily replaceable - yet.

Originally Posted by jpd80

It looks like the market has given up on Falcon but no one really knows if it's temporary or permanent, that's the scary part...

We're not going to know until Ecoboost comes on line and LPG comes back. What I think is more scary is that Ford have probably already made their decisions and all the good stuff coming later this year will be in vain...happy to be proven wrong though.

[bobthebilda]

Originally Posted by irish2

Hence the reason that Mually's 'One Ford' is the only way forward. In this global market I see neither Ford Aus or Holden surviving. Holden produced 57,000 cars last year. They have stated that they need 105,000 to be viable. Cruze is expected to sell about 30,000. That still leaves 15,000-20,000 shortfall in production for GMH. Ford Aus made a profit last year on ~50,000 vehicles.

I dont beleive Ford OZ made a profit last year (at least they havent said so). The last profit figure Ford released was in about May last year, and that was for the year 2009. From memory in 2009, they made approx $13 million in profit, on sales of about 100,000 cars. That works out to be about $130 for each Ford car sold for the year. Theres was no indication from Ford that said the $13 million was made from local manufacturing, imported cars, or from spare parts.

IMO, Its quite clear, profits would be greater for them if they abandoned local manufacturing and resorted to full importer (Mitsy still have a healthy market share after abandoning local manufacturing), and its just a matter of slowly letting things die to defray some of the flack that goes with killing a local.

[SteveJH]

That was $13 million for the 09-10 Financial year, so July 2009-June 2010 i believe.

[Brazen]

Originally Posted by jpd80

2005 to 2009 Holden lost $574 million

2005 to 2008 Ford lost $240 million

Looks like all those Holden Exports and extra local sales have been losing money for years.

How can that be? Ford lost $274million in one year alone.

If god forbid Ford should fail....

Holden and Toyota could survive, like Skoda does by itself in its country. I suspect Holden would make a Rav4, Forrester competitor off the Cruze platform and sell 1100 units a month to high profit private customers and eventually be the Asian Pacific hub for Volt production, whilst still continuing with 4000 Commodores, 3500 Cruze and 900 Utes a month, plus exports (they would probably pick up some Falcon sales).

Toyota would introduce local Kluger production which is easily built on the Camry production line in Altona, it will take over global RHD Japanese production when that stops in 2014 and use that to steal local Territory sales, could probably do 2000 a month plus exports on top of Camry and Aurion.


Ford aint going anywhere though as Ford Au is vital for the region and too valuable to throw away, heaven help any government which would let it fail on their watch!!

I would be sleeping a lot easier if Focus was being built here, thats the ticket for future vehicle production in this country. Bloody cheap to build and big profit margins as people downsize to frugal, luxurious small cars.

[stevz]

Originally Posted by irish2

Ford Aus made a profit last year on ~50,000 vehicles.

They made a profit of what, $12 million? This is pocket change for a company the size of Ford. When you consider the actual return on investment it makes things look like a complete waste of time. Besides, how do we know that local production was actually profitable? For example they could have made a $100m loss which was then offset by a $112m profit on the imported range? Too many armchair experts here who make statements as if they were board members of Ford Australia, when in reality they have no clue what they're talking about.

[bobthebilda]

Originally Posted by SteveJH

That was $13 million for the 09-10 Financial year, so July 2009-June 2010 i believe.

The result was released in early may 2010 (as per article), so couldnt be as per a financial year. The article does specifically refer to 2009 calender year.

http://theage.drive.com.au/motor-new...0506-uem3.html

[Brazen]

Originally Posted by bobthebilda

The result was released in early may 2010 (as per article), so couldnt be as per a financial year. The article does specifically refer to 2009 calender year.

http://theage.drive.com.au/motor-new...0506-uem3.html

Bobthebilda, it could be per the US financial year? As the ATO gives an exception for lodging if the parent company is US based. Not sure in Ford's case, just surmising.

[Joe5619]

Originally Posted by bobthebilda

The result was released in early may 2010 (as per article), so couldnt be as per a financial year. The article does specifically refer to 2009 calender year.

http://theage.drive.com.au/motor-new...0506-uem3.html

I too work for a US listed company & our financial year end is December, which also includes ATO income tax lodgements. I'm only guessing Ford/ GMH would be doing the same.

[stevz]

Originally Posted by bobthebilda

http://theage.drive.com.au/motor-new...0506-uem3.html

Ford built about 7000 fewer Falcon family cars and Territory soft-roaders at its Broadmeadows-based manufacturing facility after changing its production process to ensure each car rolling off the line had a buyer waiting in the showroom. Total production for the year was 99,279 vehicles.

That can't be right. Where did they get this figure from?

[Joe5619]

Originally Posted by stevz

They made a profit of what, $12 million? This is pocket change for a company the size of Ford. When you consider the actual return on investment it makes things look like a complete waste of time.

Even if Ford AUST where making 12 or even 20% profit, it would still be pocket change for Ford... Any Australian branch of a global company makes pocket change!!

[mik]

Originally Posted by Joe5619

Even if Ford AUST where making 12 or even 20% profit, it would still be pocket change for Ford... Any Australian branch of a global company makes pocket change!!

12 or 20 % is better than not makeing a profit.

[stevz]

Originally Posted by mik

12 or 20 % is better than not makeing a profit.

Agreed, but my point was that such a small profit doesn't make things any more viable.

[bobthebilda]

Originally Posted by stevz

That can't be right. Where did they get this figure from?

I think the author just used the total sales figures and put them as local production. They had sales of about 100,000 in 2009

[Brazen]

Originally Posted by stevz

Agreed, but my point was that such a small profit doesn't make things any more viable.

The point Stevz is making is ROI or return on investment. Companies I worked for usually worked on a 10-15% ROI, so for a $100,000,000 invested, they would want to make $10,000,000-15,000,000 or so a year off it, any less and it wasnt worth it for the price of debt, administration, and (financial, regulatory, market, legal & currency)risks involved - As you can put money in a bank account and get 6% ROI.

[Joe5619]

Originally Posted by mik

12 or 20 % is better than not makeing a profit.

Correct, but Ford AUST could only dream of that sort of profit %!!

But a profit (even if small) is always better than a loss..

[SteveJH]

My question on that, is whether FG Development was counted as a sunk cost, in which case that $13 mill means FG will not break even. Or if FG Development cost as a portion of each falcon sold was subtracted from the gross profit to give that net profit.

ie. Is the FG Falcon going to break even over its life?

If the answer to that is either no, or yes by only a small amount (say less then the 12% stated above), then there will not be a new Falcon platform in 2016.

Because that $13 million included all sales, of which Territory and Falcon were only around 50%.

[bobthebilda]

Originally Posted by Joe5619

Even if Ford AUST where making 12 or even 20% profit, it would still be pocket change for Ford... Any Australian branch of a global company makes pocket change!!

See, now your going where most games of chinese whispers go. You have changed $12 million to 12%. No one knows how much money Ford has invested in australia, so it would be impossible to convert anything into percentages.

An auditors report a couple of years ago, reported that Holden actually had net assets of minus $200 million. Obviously if they keep losing money, then its not a going concern, and the government or head office will need to put up more money to keep it going. Ford havent released any figures to reveal how many assets they have in OZ. If its under $200 million, then it might be argued that $13 million profit a year is giving them an ok return. But then again, it could be argued that if they pack up and left, then writing off $200 million aint a big loss in the big scheme of things.

[Struggo]

Originally Posted by Road_Warrior

I'm going to plant an I.E.D. in Drive's lunch room.

[Brazen]

Originally Posted by SteveJH

My question on that, is whether FG Development was counted as a sunk cost, in which case that $13 mill means FG will not break even. Or if FG Development cost as a portion of each falcon sold was subtracted from the gross profit to give that net profit.

ie. Is the FG Falcon going to break even over its life?

If the answer to that is either no, or yes by only a small amount (say less then the 12% stated above), then there will not be a new Falcon platform in 2016.

Excellent point! This is where it starts getting interesting. Not working in this field anymore I still find it terribly interesting. One things for sure, I dont really pay much attention to Profit and Loss statements as they are easily (and delibrately) manipulated, especially in a high-tax country like Australia - the less profit the better!! I pay more attention to balance sheet and revenue.