Why Ford will fail in Australia
Ford in Australia is out of touch and systematically vulnerable to commercial forces beyond its control. Could it do a 'Holden' in the foreseeable future?
Ford in Australia has set itself up for medium-term commercial failure. Nobody reports this, but blind Freddy can see it.
The company is out of touch, and its viability depends on one vehicle. Let’s deal with ‘out of touch’ first.
Out of touch…
A Ford press release alert crossed my inbox on the 22nd of October. Normally I lose consciousness when this happens. That miracle cure for insomnia - when arrogance and irrelevance collide, ie. anything Ford considers to be newsworthy. (Which usually means irrelevant V8 Supercars results, as if anybody is watching, and the launch of yet another poorly designed shitbox nobody wants, statistically - we’ll get to that.)
Here’s what Ford Australia was itching to tell us all about:
I immediately thought, ‘If this is a lottery, what’s second prize? Two of those death-traps?’
Andrew Birkic there, President and CEO, Ford Australia and New Zealand.
Even in such a high-yielding stupidity mine as Australia (and we pretty much do lead the developed world in this area) it’s remarkable that Ford has managed to drill into a vein of ‘stupid’ this rich. But the well is drying up. We are past the point of ‘peak stupid’. Might have to resort to fracking, to exploit those final Mustang-receptive morons Down Under.
“All the hardware to delight.” Andrew Birkic there, again, in my view failing to acknowledge the elephant in the room. Which would be: This is a car that will cost you almost $90,000 on the road. And while it will be quite speedy, if crash tested today, it would fail (in so far as I can tell) to earn even one star for safety under the current ANCAP/Euro NCAP test protocols.
On my world, this is both disgraceful and indefensible.
They should call Mustang what it really is: The kid killer. When re-tested late in 2017 by Euro NCAP, Mustang - same platform as today - scored 32 per cent for child occupant protection. That’s disgraceful.
Four points out of eight for the dynamic side impact test. 2.17 out of 12 for restraint installation. Zero out of 13 for on-board safety features - to protect child occupants.
Head protection for a 10-year-old was rated as (quote) “poor” - the worst possible rating. They mean ‘death trap’. That’s for the side impact test. For a 6-year-old, chest protection was (quote) “marginal” in the frontal offset crash test.
So let me just paint the picture here: Rich, misguided dude drops $90k on the new Mach 1 safety shitheap. Then one day, he has to nip up to the shops for the milk and bread, and he’s kid-minding today, so the 10yo and the 6yo get jammed in the mighty Mustang.
He’s doing, like, 60 kays an hour, and out of nowhere he gets T-boned - no fault of his. And he’s okay, gets out dazed and confused, but uninjured. (Side impact protection for the driver is actually OK in the Mustang.) But unfortunately, one of the kids is dead, and the other one is brain-injured. And if they’d been in a Mazda3 or a Kia Cerato, or dozens of other five-star cars costing a third of the price, they’d both be quite okay.
I’m an engineer. That’s what these safety ratings tell me. It’s a hypothetical, certainly - but this is the position you are in. ANCAP would never put it like that, because they’re always in manufacturer appeasement mode - they want the cars supplied free for testing, right? It’s, like, a boys club. And they’re out of touch - ANCAP that is >>.
Ford just wants to tell you is how much pleasure, delight and excitement they’ve managed to package up for you this time around, in this somewhat irrelevant, expensive dinosaur of a car that, increasingly, nobody buys. Like, we’ve got rev-matching now. Which I’m sure is awesome.
And the media just laps it up, because who doesn’t like spending a week in a 345-kilowatt V6 with rear drive and a new six-speed Tremec box with rev-matching? Especially if you manage not to crash for a week, and you don’t have kids.
What a pity the passion for engineering prowess, which allegedly orbits Mustang in R&D, was not devoted to fundamental respect for the lives of the children of Mustang customers. I challenge any dipshit Ford designer to defend these decisions - because they are decisions.
Things didn’t just turn out this way for Mustang - they took the decision not to give a shit about this.
Strategic vulnerability
The fact is, Ford in Austrailia is one vehicle away from outright commercial collapse - and that vehicle is Ranger, and (to some extent) its dizygotic spin-off, Everest. Everest exists only thanks to Ranger, and they roll on essentially the same architecture. Both spew from the same Ford factory in Thailand. Everest is Ranger, with a box (instead of a tub) on the back.
Ranger 4X4 is the big win for Ford, with 26,377 sales so far this year, augmented by about 1800 Ranger 4X2s and about 4000 Everests. Together these comprise 32,000 of the almost-41,000 sales Ford Australia has made so far this year.
It’s about 80 per cent of the business - if you want to call it a business. It’s really an implosion looking for a trigger.
In other words: Endura, Escape, Fiesta, Focus (remember the PowerShit transmission?), Mondeo, and Puma are all nowhere. Statistically, nobody buys them. This is the real ‘Ford Australia’ story - and it’s not being reported because publishers want Ford’s advertising revenue, right up to the day when Dr Kevorkian gets on the line from Dearborn.
Every non-Ranger based vehicle in the Ford inventory is costing the business money just by being there, available for sale. Homologation, parts, training - whatever. For vehicles people do not buy. Ford would be more profitable in Australia without them.
I guess the Ford Transit is successful in the context of vans, with about 2300 sales so far this year: Number three, behind Hiace and iLoad. Just to be fair.
But without Ranger and its derivatives, Ford Australia would have slightly less commercial footprint than Chinese upstart, MG. Or, it would be slightly in front of LDV (by about 2500 sales) at this point of 2020.
LDV T60 offers value that should terrify Ford…
…which I suspect it probably does.
To me, this is huge strategic risk. ‘Vulnerability’ is a better word. It takes just one disruption for Ford’s business to collapse in Australia. This could easily be an own-goal. Like, say the next Ranger is a dog with fleas - or the market perceives it as such. The business collapses.
Of course, this might not occur like the meteor that killed all those lizards, 66 million years ago. Death for Ford Australia could also come in the form of a thousand incremental cuts. See, relative newcomer, LDV, which sold 3258 T60 4X4 pick-ups so far this year.
They were nowhere just four years ago. And I’m not suggesting a T60 is line-ball with Ranger. Not at all. But a fully-loaded T60 is $35,000 cheaper than a fully loaded Ranger dual cab. And hey, it’s even $7000 less than a poverty Ranger dual-cab pick up. And clearly those 3258 people who bought T60s did so instead of buying a Ranger (and every other established ute).
Let’s say LDV keeps plugging away, incrementally. Let’s further speculate another Chinese ute manufacturer enters the fray. And (heaven forbid) Hyundai or Kia removes a finger from the distal end of its shared digestive tract and actually produces a decent 4X4 dual-cab, and brings it to market here. Look what the advent of iLoad did to HiAce all those years ago.
Incremental conquests of this nature could easily up-end Ford Shitsville over the next five years. It’s a gentler demise, perhaps, but the end result is of course the same. A flatline on the monitor - just like Holden - and ‘press release’ platitudes from senior executives such as Andrew Birkic.
The future for Ford dealers?
Imagine being a Ford dealer and looking across the road at what happened to Holden dealers earlier this year - and knowing the value of your franchise depends not on the strength of the brand and its broad appeal across the population (that heritage…) but on the ongoing popularity of just one product in an inventory of 10 models, nine of which are unsustainable - collectively unsustainable…
Knowing that the future of your dealership business rides on senior executives at Ford making all the right calls with future Rangers - and the right strategic plays against both new and established competitors. Ranger’s current popularity is serendipitous - it’s not like they planned it.
I don’t know about you, but that would make me feel intensely vulnerable - more vulnerable than the execs at Ford Australia’s head office, who might actually cop promotions overseas for keeping the old girl running before it heads down to the floor of the Marianas Trench.
The Ford Ranger is the most popular vehicle in this country because it has grunt, great towing ability, a capable drive system, and a host of clever design features. But there are a couple of negatives to consider before dropping your cash on one.