Declining annual sales threaten locally made Falcon.
The fate of the Ford Falcon will be decided within months of the new model going on sale, according to industry analysts.
Optimism for Australia's smallest remaining car-maker is thin on the ground, with many saying the numbers do not add up and that the local industry will shrink to two players.
Tony Robinson, director of operations at fleet consultant Innovation Sureplan, said a poor start for the new Falcon would quickly doom the nameplate. “We will know within the first three months of the new Falcon being released,” Mr Robinson said. “It will be as early as that.”
He said demand for large cars had fallen more than expected and that one badge would be squeezed out.
“Is it a two-car or a three-car race? I tend to think it might be only a two-car race,” he said.
Automotive partner at KPMG David Gelb agreed that the Falcon's future rested on a knife edge. “The key question is whether the volumes will be sufficient. Ford produces less than Holden or Toyota and economies of scale are critical. (Ford's) challenges are going to be greater.”
Ultimately, a shakeout would spell the end for one player.
“I don't think there's room for three to all run economically — the market's not big enough,” he said.
The new Ford sedan, which will be unveiled in Melbourne next weekend, represents the biggest change in a decade for the model but it comes after the worst year for Falcon in nearly half a century. Sales slumped 20 per cent last year and the large car attracted fewer than 34,000 buyers.
While the Holden Commodore held on to bestseller status, the Falcon slipped down the sales charts to finish behind the imported Toyota Corolla, Hilux and Mazda 3.
Sabu John, who teaches manufacturing strategy at RMIT, said Ford looked more vulnerable than Toyota or Holden because it relied almost exclusively on domestic sales.
“They're not strategic enough. They need to rejig the Falcon and make sure it's got an export program,” Professor John said.
There was cause for hope with the decision to make the Focus here in 2011, because the prospect for small cars was better long term. However, Ford Australia was ultimately a hostage to decisions made in Detroit.
Mr Gelb said conditions for local makers would only get more difficult, with rising interest rates and another tariff reduction scheduled for 2010.
Despite record vehicle sales over the past few years, the large car share has shrunk by two-thirds and failed to cash in on the boom. Tariff reductions have made imported vehicles more competitive just as large cars are losing favour with Australians.
Mr Robinson said changes to leasing arrangements had been decisive in giving buyers more choice, benefiting imported models at the expense of traditional fleet suppliers.
Ford Australia president Tom Gorman said it was “ridiculous” and “premature” to write off the Falcon with a new model just weeks from launch. “We see the large-car market as 130,000 to 140,000 vehicles a year and if we get our fair share of that we're in a position to have a solid business,” he said.
