Ford Australia records biggest loss ever for 2008

Ford Australia records biggest loss ever for 2008

Ford Falcon XR8 FG fq

Last year was a difficult time for automakers worldwide so it’s little surprise that Australian vehicle manufacturers have also been doing it tough with the economic recession and a shrinking local vehicle market.

The crisis, and the sudden desertion of showrooms by consumers, caught out auto manufacturers globally with swollen inventories, little revenue, top-heavy workforces and significant debts. And in the US, two of the Detroit Big Three are now a shell of what they were just one year ago.

The Australian market in 2008, though starting strongly in the first quarter and on target to another record year, slowed to a stumble and was propped up by heavy discounting by the fourth quarter.

Of the local manufacturers, Ford Australia took the heaviest blows, posting a record loss in 2008 of $274.4 million AUS – triple the loss of the preceding year.

Despite the launch of the acclaimed FG Falcon, it was slow to gain traction and Ford sales across all models slumped 7.4 percent in 2008, generating just $3.06 billion AUS for the company last year. Falcon sales in particular were disappointing, with the refreshed model line actually selling six percent fewer cars in 2008 than the outgoing model the year before.

While the Territory has long been a star performer in Ford showrooms, last year its glory run stalled, with the ageing crossover recording 25 percent fewer sales in 2008 than 2007 (and down 37.7 percent more this year).

The position for Ford though may not be as bad as it looks and included, a one-time restructuring cost of $162.18 million, and, thanks to superannuation funds going into reverse, a provision for a further $151.12 million for Ford employees’ defined benefit retirement fund.

A loss is never good news, but Ford’s announcement needs to be considered in the context of a very difficult trading year for all manufacturers. It’s not time to give up yet and things ahead should look a little brighter for Ford Australia.

Ford Falcon XR8 FG fq

Last year was a difficult time for automakers worldwide so it’s little surprise that Australian vehicle manufacturers have also been doing it tough with the economic recession and a shrinking local vehicle market.

The crisis, and the sudden desertion of showrooms by consumers, caught out auto manufacturers globally with swollen inventories, little revenue, top-heavy workforces and significant debts. And in the US, two of the Detroit Big Three are now a shell of what they were just one year ago.

The Australian market in 2008, though starting strongly in the first quarter and on target to another record year, slowed to a stumble and was propped up by heavy discounting by the fourth quarter.

Of the local manufacturers, Ford Australia took the heaviest blows, posting a record loss in 2008 of $274.4 million AUS – triple the loss of the preceding year.

Despite the launch of the acclaimed FG Falcon, it was slow to gain traction and Ford sales across all models slumped 7.4 percent in 2008, generating just $3.06 billion AUS for the company last year. Falcon sales in particular were disappointing, with the refreshed model line actually selling six percent fewer cars in 2008 than the outgoing model the year before.

While the Territory has long been a star performer in Ford showrooms, last year its glory run stalled, with the ageing crossover recording 25 percent fewer sales in 2008 than 2007 (and down 37.7 percent more this year).

The position for Ford though may not be as bad as it looks and included, a one-time restructuring cost of $162.18 million, and, thanks to superannuation funds going into reverse, a provision for a further $151.12 million for Ford employees’ defined benefit retirement fund.

A loss is never good news, but Ford’s announcement needs to be considered in the context of a very difficult trading year for all manufacturers. It’s not time to give up yet and things ahead should look a little brighter for Ford Australia.

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