Ford Australia says comments by its president contending that vehicle research and development operations can survive without manufacturing are not an indication the company is considering ending local production of its Falcon and Territory vehicles.

Ford Australia president and CEO Bob Graziano told Australia’s automotive media earlier this week he believed it was preferable, but not essential, to build cars in a country that is home to a global design hub, like Australia.

Graziano’s comments sparked speculation that Ford is preparing to end local vehicle production, which it has committed to until the end of 2016 but not beyond that point.

Ford Australia spokeswoman Sinead Phipps sought to clarify those comments on Wednesday, telling ABC Radio that Graziano was not suggesting Ford was thinking about abandoning its Victorian manufacturing operations.

“Absolutely not,” Phipps said. “Bob was talking about manufacturing in terms of the context of the design process.

“He further went on to clarify that we believe we’re lucky in Australia that we have all three vehicle development stages here, that we can design and engineer, we can manufacturer, and we can test here.

“So there was no hint implied in any way.”

The long-term future of Ford Australia’s manufacturing remains under a cloud, however, as sales of the Ford Falcon large car continue to decline. On the back of a record low in 2011, Falcon sedan sales have fallen a further 28.7 per cent this year, putting Ford on track to sell fewer than 15,000 across the country for 2012.

In January, Ford Australia announced a $103 million investment to update the Falcon and Territory in 2014, confirming that the updates would take the Falcon through to at least the end of 2016.

Graziano’s comments came at the unveiling of Ford Australia’s refurbished local design centre in Campbellfield, which has undergone its first significant upgrade since opening in 1970.