Ford executives extend uncertainty over Falcon and Territory futures

Senior Ford executives have again refused to guarantee the future of Australian-built Fords, admitting the Falcon large car is hindering local sales and suggesting the Territory SUV could eventually be replaced by a global model.

The US company’s president and CEO, Alan Mulally, and group vice president and president of Asia-Pacific and Africa, Joe Hinrichs, continued Ford’s reluctance to commit to the long-term future of the Falcon and the spin-off Territory at the unveiling of the company’s new baby SUV, the EcoSport, in India.

Australian new-car sales figures to be released on Thursday are expected to confirm the worst annual sales yet for the Falcon, down about 40 per cent year on year with fewer than 20,000 units sold in 2011

Hinrichs said he had seen the sales figures and admitted the Falcon’s performance had dragged down the company’s overall sales performance.

“The interesting thing about Australia is that the new [Ford] products have done well for us but of course the Falcon sales decline has kind of offset the [success of the] new [imported] products,” said Hinrichs.

“The [large car] segment got smaller and our share of that segment got smaller – that’s two reasons [for the Falcon’s decline].

“Some of that is we made a conscious decision not to participate in some parts of the segment that weren’t attractive to us… some of the fleets [business] we’ve got to do better as a brand.

Hinrichs says Ford needs to “shore up” Falcon and Territory sales while continuing to grow sales of imported products such as the Focus small car and forthcoming Fiesta-based EcoSport SUV.

He says the Falcon’s sales numbers are lower than Ford would have liked while also admitting it was difficult to know when or if sales of the large car would eventually stabilise.

“We’d like to see Falcon rebound but we don’t know where the [large car] segment is going to go. The segment declined this calendar year faster than we expected.

“I think Territory has more opportunity to rebound than Falcon, if I were to be pragmatic about it. But we’ll see how [the four-cylinder turbo] Ecoboost [engine] performs with the Falcon."

Hinrichs said the Falcon’s current sales were only sustainable for now.

“At the current investment cycle that we’re in, the answer to that is yes [it is sustainable at current sales level]. Not forever … and we’ll more to say over time on that.”

“It is a very important part of our product portfolio Australia. Is it as important as it was five years ago? No.”

Hinrichs said people shouldn’t underestimate the importance to Ford of both the Falcon and Territory, but when pushed on whether the Territory could continue in the future as a stand-alone SUV in Australia the company’s group vice president hinted the Falcon-based SUV may eventually become a victim of the One Ford strategy that sets out to establish a single model for every global market.

The Territory ended 2011 as Australia's best-selling SUV as a result of an update that included, crucially, a new turbo diesel option, but Ford has a number of large SUVs around the world, including the Explorer, Edge and Endeavour/Everest.

“We just made major investments in Territory for a reason. We have intentions of that being part of the portfolio for many years to come.

“I think eventually it won’t sustain itself [as a stand-alone SUV in the Ford world] but that’s not in the near term. We continue to make investments in Territory and we’ll continue to make investments in Territory. It’s a very important product for us in Australia.”

Hinrichs also said Ford was continuing to invest in Everest, pointing to the model that in next-generation form will have had significant Australian input due to the fact it is based on the Ranger ute platform that was developed by the Ford Australia engineering team.

Ford boss Alan Mulally reiterated his love for the Falcon but wouldn’t provide an update on what Australia’s involvement would be for the next-generation model due in about 2016.

Mulally told Australian media on the eve of the 2010 Detroit motor show that the company was no longer looking to build unique vehicles for different markets and hinted strongly this week that the next Falcon will sit on a global platform.

“Our large-car strategy is the same,” said Mulally. “Ford is going to have a complete family of vehicles: small, medium or large, utilites and trucks.

“We’re going to have a Taurus-sized platform. We’re going to have a large sedan going forward.

“Based on what you just said [about poor Falcon sales in 2011] you can see why the Ford strategy is so compelling.

“Global platforms, global scale… that’s why it’s so competitive worldwide.

“With Fiesta, we’re going to make about two million vehicles off the same platform. On the Focus platform alone we’re going to have about 12 different top-hats [exterior body designs].”