Ford chief endorses ‘build-to-demand’

AS THEY make the transition to selling imported cars only from late 2016, Ford dealers can apparently rest easy that the company is not planning to force-feed its retailers with excess stock nor engage in distress selling and discounting to clear over-ambitious production demands.

They have that on the authority of none other than Ford Motor Company president and chief executive Alan Mulally, who told GoAuto at the ‘Go Further’ company event last week that matching production to real buyer demand had become “the foundation base for Ford over the past seven years”.

The issue is important to Australian dealers, many of which are being subjected to a withering array of programs designed to force them into taking far more stock than makes business sense by car importers trying to clear over-ambitious production schedules in foreign car plants.

Asked if over-production was a mistake which sent car-makers close to the wall, and one that Ford had deliberately avoided, Mr Mulally said: “Absolutely! What you are talking about is so important”.

“As you know most manufacturers around the world did not match production to demand which meant they had to push the stock into the distribution channels and then discount the vehicles which ruined the residual values. That in fact actually delayed the recovery from the recession,” he said.

“We decided as a team seven years ago that we were going to deal with this and that it would be right for the business and right for the consumer that we would take the lead and match production to real demand. That keeps residual values up and it respects the customers.

“Now different car companies do things differently because of different situations around the world but I think the world in this past seven years has gone through a tremendous transformation where companies have gone out of business and others have gone into bankruptcy.

“So there has been a tremendous learning and a tremendous appreciation that it is really, really important to match production to demand,” he said.

President of global marketing, sales, service and Lincoln, Jim Farley, added that the strength of the dealer network was a “key strategy for here in Australia”.

“The retail channel is a growing focus for us and our channel link is a really important part of our growth here in this market,” he said.