Wednesday, July 18, 2012

Ford killed Ford

THE Ford Falcon is limping to its grave. Ford's head office is not going to save it. Without a sudden reversal of taste, Australia's car buyers are not going to save it. And given all that, no future government will save it.

In the first half of 2012, Ford sold just 9083 passenger Falcons and 3304 utes. Passenger sales were down 25 per cent on last year, which in turn was down 65 per cent from 2005. This has been a long death; the buyers slowly turned away.

It used to be different. Once, the Falcon was Australia's top-selling car, a family icon. For decades, manufacturing the Ford Falcon was Melbourne's biggest industry. Even in 2003, the Falcon family sold 105,000 vehicles 97,000 in Australia and 8000 as exports with an Australian design and 80 per cent Australian content.

Then our tastes changed. Oil prices rose. Families shrank. Business became more cost-conscious. And the dollar started its immense rise. The Falcon was a big petrol guzzler, and they went out of fashion. By 2010, Falcon family sales were down to 44,000. This year, they will be barely 25,000.

Some of that went to its cousin, the Territory. But even the Territory has lost ground as the high dollar made its foreign rivals much cheaper and put export markets out of reach.

Ford's US bosses failed to be decisive. They wanted their cars to have global platforms, yet the Falcon's rear-wheel drive was unique to Australia. They would not allow it into the big export markets that underpinned Holden and Toyota. And they kept it as a big powerful guzzler when tastes changed.

So were the federal and state governments wrong to throw Ford a lifeline in January? The Gillard government pledged $34 million, and the Baillieu government a secret amount, so Ford would produce one more model here, and keep manufacturing to the end of 2016.

Arguably, it was a bad call. But that money is earmarked to develop the next Falcon and Territory, not to support the current ones. And there are still 55,000 Australians employed in car manufacturing, 30,000 of them in Victoria.

Holden and Toyota are better placed to survive. They have good export markets. The Commodore and Camry/Aurion are selling better than the Falcon, and Holden's Cruze has been a hit. Hopefully they can sustain the industry.

Unless the dollar falls, unless our tastes change, unless Ford's global strategy changes, the next Falcon will be the last. Its end will send shockwaves through Melbourne, Geelong and the car parts industry but not as badly as it would have a decade ago. This has been a long, slow farewell to our old icon.