Manufacturer cites strong Australian dollar and mounting losses as primary reasons behind ceasing production

Ford has announced that it will end all production in Australia in 2016, closing two plants which employ 1200 people.

It has blamed the strength of the Australian dollar, high business costs, mounting losses and a declining market. The president of Ford Australia, Bob Graziano, said: "Our costs are double that of Europe and nearly four times Ford in Asia."

The manufacturer will shut its Geelong-based engine plant and its vehicle production facility in Broadmeadows, both of which are in the state of Victoria. Dealership and development facilities will remain open, however, and Ford will become an import-only brand. Among the vehicles produced at Broadmeadows are the Fiesta and the Falcon.

Ford has been active in Australia since 1925; last year it built approximately 37,000 vehicles but suffered a loss of £93m. Graziano stated that Ford had lost, in total, £386.5m in Australia over the past five years. The strong Australian dollar has made it difficult for Ford to sell its products at a competitive price against foreign rivals.

It is expected that Ford will continue to participate in the Australian V8 Supercars series until at least 2016, despite it withdrawing its local manufacturing facilities.

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Comments
15

23 May 2013

Closing or selling plants seems to be Ford's only strategy in dealing with loss-making units.

It's a sad day for many Aussies, that's for sure.

23 May 2013

Its good Ford are not shying away from making tough decisions, there is considerable over capacity in car manufacturing.

With a still very fragile world economy, all it needs is a further downturn and the billions bleed.

I hope Ford looks after its employees well in the rundown.

 

23 May 2013

so that's what that strategy means ... only one ford factory left in a world ...

 

should have learned from original mondeo but noooo ...

 

two kinds of people : bored golf drivers and bloody liars

23 May 2013

World over capacity isn't an issue for the broadmeadows & geelong plants. Broadmeadows only builds the Falcon (RWD Sedan) & Territory (SUV) for the Australian market. Sadly, due to bad planning, Ford Australia does not export vehicles at all.  The Falcon is a decent car, but is part of a market segment that is in serious decline.

23 May 2013

Sadly with the considerable strength of the Aussie Dollar, it really is impossible for any car producer to export significant volumes from Australia.  In fact it even costs more to make a vehicle domestically than it does to make it in Japan and import it to Austrlia.

23 May 2013

March1 wrote:

Sadly with the considerable strength of the Aussie Dollar, it really is impossible for any car producer to export significant volumes from Australia.  In fact it even costs more to make a vehicle domestically than it does to make it in Japan and import it to Austrlia.

And that is the crux of the problem.

Only a few years ago, you could get 3 Aussie Dollars to a Pound Sterling. Now it's more like $1.4 -$1.5, i.e. more or less on a par with the US Dollar. I was in Sydney last Sep and couldn't belive how expensive everything was. The equivalent of nearly 2 quid for a can of coke or a Mars bar. The booming mining industry, while producing benefits in other areas, has definitely put an end to Australia as a cheap-ish country, as it used to be.

23 May 2013

I always thought they could've imported the Falcon, albeit with sensible diesel or 4 pot petrol engines, to the UK as a Granada replacement.

Some funeral parlours did this.

What will it mean for the Australian Holden-Ford rivalry, if the blue oval is no longer 'native'?

K_A

23 May 2013

06eleven wrote:

World over capacity isn't an issue for the broadmeadows & geelong plants. Broadmeadows only builds the Falcon (RWD Sedan) & Territory (SUV) for the Australian market. Sadly, due to bad planning, Ford Australia does not export vehicles at all.  The Falcon is a decent car, but is part of a market segment that is in serious decline.

Ford does indeed export the Territory SUV to Thailand with a 2.7-litre V6 TDCi turbo diesel. It would've been nice for Ford to import the Falcon into the UK, to rival the Vauxhall (Holden) VXR8 (HSV/Commodore).

23 May 2013

Since 1972, the Falcon has been an Australia only model and when you've got a country with just over 20,000,000 as your only customer base, it was inevitable that tough decisons would need to be made with a limited market and under capacity factory. The Holden Commodore in comparison is a generic GM product sold under different GM brands worldwide.

I suspect that under the One Ford theme, future Falcons will be rebadged Ford Taurus', although current Taurus' are FWD and 4WD.

 

23 May 2013

There used to be a real '..you a holden or ford man?' split in Oz, and the severe taxation on imports of european products - protectionism in other words - encouraged this lack of choice.

With the unbelievably strong Oz $, at least what they import now - presumably US made Fords (?) - should be cheap. 

I hired a XR6 Falcon over there recently - which was essentially a reasonably nippy large Mondeo - totally unmemorable though. The hire guy seemed to think it was something special however.

 

 

R

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