Ford Australia will cut vehicle production in the lead-up to September’s federal election following record-low sales, which the company has blamed primarily on the government’s proposed fringe benefits tax (FBT) rule changes.
The Ford Falcon plummeted to its worst monthly sales result in the nameplate’s 53-year history in July, with the Broadmeadows-based manufacturer delivering just 594 sedans for the month.
The result was 37 per cent off the pace July 2012 when Ford sold 941 units, and saw the Falcon limp to a year-to-date sales figure of 5664 – 27 per cent down on the same period in 2012.
Sales of Ford Australia’s other locally manufactured vehicles – the Falcon Ute (355) and Territory (966) – also fell 11 per cent in July.
Ford Australia communications and public affairs director Sinead Phipps said the company had experienced a noticeable drop-off in vehicle orders in the past three weeks.
“Falcon sales slowed in July, particularly in the second half of July after the FBT proposed changes were announced,” Phipps said.
“Feedback from our dealer network is that they anticipate that slowdown will continue at least through August and September while people are concerned about what’s going to happen in that space.”
Phipps refused to speculate on August and September Falcon sales figures, but could not rule out the model sinking to even deeper depths in those months.
As a result, the company has been forced to schedule 12 non-production days over the next two months to balance supply with demand.
“Obviously it’s not a good thing for us to build too many cars that we then have to significantly discount,” Phipps said.
“It doesn’t do anything for the brand or for customers’ residual value, so our current policy is to match production to what realistic market demand is.”
Phipps confirmed workers would be stood down for those 12 days on either 50 or 60 per cent pay, but could top that up with annual leave entitlements if they wished. Ford Australia currently produces 148 vehicles per day, split roughly 50:50 between Falcon and Territory.
It now looks increasingly unlikely Ford will crack 10,000 Falcon sales this year, needing to average 867 units for the remaining five months of 2013 to achieve that humble milestone. Sales figures are unrecognisable from just 10 years ago, when the local division sold 73,220 Falcons across the country at an average of 6100 per month.
Phipps acknowledged the company’s decision to cease local production in October 2016 “could well be a factor” in the Falcon’s declining sales, but insisted it was still 100 per cent committed to building the Falcon for the next three years.
She said Ford Australia had been involved in discussions with the Federal Government both privately and with the Federal Chamber of Automotive Industries (FCAI) since the announcement of the FBT changes.
“We don’t discuss the specifics of our private discussions with the government publically but they are well aware of the effect it is having on us,” Phipps said.
“They’ve indicated that they’re prepared to work with us, but they’re also indicating that if they regain power these proposed changes will go through, so we just need to work through what all of that means.”
Phipps confirmed Ford was also engaged in “very early discussions” with the government about its slice of the $200 million support package promised to Australia’s three car makers yesterday by industry minister Kim Carr.
“Obviously it’s been announced and we now need to find out a little bit more about how it will be implemented, but that level of detail hasn’t been shared yet so those discussions still need to happen.”
Ford will launch heavily updated versions of the Falcon and Territory in 2014, details of which are expected to be revealed at a media event in Sydney next week.