How Ford stays on top of the UK car market
Roelant de Waard, Ford of Britain's managing director and chairman, talks about the way forward

Ford is more than holding its own at the moment.

Year-to-date sales see the UK's biggest car seller 4.6 per cent ahead of last year and more than 2 per cent ahead of the market.

The ubiquitous Focus remains the UK's biggest selling car as it continues to dominate the retail, fleet and diesel sectors.

Meanwhile dealers are receiving an added boost this month with the third generation Mondeo now on sale.

While the diversification caused by niche products means the upper-medium sector is no longer the mass market it was when the first Mondeo turned the sector on its head back in 1993, it is still an important battleground for the volume players.

Even in run-out the outgoing model sold around 22,000 units this year - more than some brands manage in a full year.

Although the Mondeo has served the brand well in both fleet and retail sales, the market has moved on and Ford sells family-sized alternatives in the shape of the C-Max, S-Max and Galaxy.

Ford's dominance is not confined to the car market as the brand also lays claim to being the best selling van supplier since 1966 with a 5 per cent rise this year in LCV sales boosted by the all important new generation Transit.

On top of this the blue oval's factory-owned fledgling dealer group - Ford Retail - reported a £3m profit for 2006 having lost £5m the previous year.

Heading up Ford's UK operations as both chairman and managing director for the past 16 months is Dutchman Roelant de Waard.

A Ford career man, he has worked in product development in the US, was managing director of Ford in the Netherlands, the director in charge of Ford of Europe's customer service division and gained an invaluable insight into dealer operations as the head of European retail management.

In 1994 you sold 127,000 Mondeos but last year that figure had fallen to 48,000. With the changes that have taken place in the upper-medium sector over the intervening years just how important is the upper-medium sector to you as a brand?

The market has declined significantly. Customers have gone for alternatives, such as mini-MPVs, but it's still an enormous market in the UK and accounts for around 450,000 sales.

The mini-MPV market is about 50,000 sales. There's been a proliferation of vehicle offerings from different platforms and an element of downsizing to the C-segment that has changed the sector.

What problems do you and your dealers face with the Mondeo competing against the C-Max and S-Max?

We've recognised the proliferation of vehicle offerings. Customers go in different directions and we have responded to and in some cases anticipated that. We responded with the C-Max; while the S-Max anticipated changes so we have introduced our share of vehicles which are alternatives to traditional family cars.

We have been increasing our market share during the past couple of years but it does mean the number of offerings serving the same number of customers is exploding.

The Mondeo has traditionally been a huge player in the fleet market. Do you see that continuing with the new model or will it be more evenly split between fleet and retail?

New Mondeo: Expected to be a best seller
New Mondeo: Expected to be a best seller

I think it is very difficult to determine what a fleet or retail sale is. The vast majority will have a business use even if they are sold as a retail vehicle with a mileage allowance.

We think user-chooser vehicles will have a much richer mix in terms of specification which is exactly what we saw with S-Max. The early orders have a high content of titanium and more powerful engines.

The fleet workhorse used to be the 1.8 LX but do you expect the car to move more upmarket and for a greater number of sales to be diesels?

We've deleted the LX - we only want vehicles which are aspirational and well equipped. That way when they come back as used cars they will have the features which will definitely be in demand and that will positively impact our residuals.

The five-door 2.0-litre 140bhp diesel will be the top seller but I think we will also see significant growth of the estate. With the previous model the wagon accounted for 25 per cent of sales but I think this will rise to 30 or 40 per cent which is not at all unusual on the continent.

Would you say you are aiming this model at Passat rather than Vectra buyers?

We're not necessarily aiming at those buyers. We're aiming at what we see as a growing proportion of customers in that segment who will expect a richer experience.

It might not be that we get Passat buyers but we will get C/D segment buyers from cars such as the Primera, 407 or Vectra who want a step up for their next vehicle.

The Passat is offering that already to some extent and we believe we are doing the same with the model's craftsmanship, design, equipment and handling where we feel we are beyond the competition.

How rigidly will you be able to stick to your no haggling policy on the new Mondeo?

We have consciously changed the pricing strategy and have added equipment but lowered the price. We also wanted to appeal to user-choosers for whom the benefit-in-kind expense is important and we decided the way to go was to have a lower, no haggle, retail price.

Will sales staff in dealerships be comfortable with that?

Well, the strategy has worked on the Focus ST and S-Max so I believe there is quite a good comfort level in the sales force to apply that strategy.

As long as customers see a value, which might be in their monthly rate and a good part-exchange price, then it will be OK. That determines value - not a high price and high discount.

The launch of the Mondeo coincides with your rural dealer recruitment programme. How important is it for you to fill these open points?

It's very important. There is a lot of demand outside of urban areas and we can satisfy that demand either with a full service dealer or at least service representation.

People might be happy to travel to buy a car but if they can't get their car serviced locally then it becomes an inhibitor. The sales volume is also relevant. We believe there is upwards of 5,000 units of unserved customer demand.

How important is service retention as part of this programme?

Local representation is important for sales and servicing. Customers buying in the city might be faced with hassle when they need their cars serviced and it's important to get that service nearer to them.

In the UK dealer service retention is lower than on the continent - that's an industry-wide phenomenon. I think one of the reasons is that we have a less dense network representation and we just don't satisfy the customers with local servicing.

How many open points do you have?

It's 50 or more.

You've had a strong year so far. How do you see the rest of the year panning out for Ford and the rest of the industry?

Industries can look strong but it's still hard work. We shouldn't underestimate how much energy and effort goes into selling these numbers.

We are carefully following the interest rates and if anything is going to get in the way of developing at the present trend then it is that. For us the outlook is good. We have strength across our vehicle lines despite new entrants coming into the market.

Fact file: Roelant de Waard

Age: 45
First Car: Peugeot 204
Favourite book: "I'm not a big reader and have never read any management help books!"
Hobbies: "I recently started racing a Caterham. I've had 14 races so far and my speed is getting better."
Favourite film: Being There with Peter Sellers
Favourite music: 1970s soul and 1990s old style house
Favourite newspaper: Financial Times

After 16 months in the UK what is your perception of UK dealers?

I think British dealers are very professional. Many have very good marketing capability, work with professional communication agencies, have professional call centre operations and most have well managed customer databases. I think they are definitely among the best in Europe.

Email Small Delicious Icon  Delicious Small StumbleUpon Icon  Stumble Upon Small Facebook Icon Facebook Small Google Icon Google Bookmark
HAVE YOUR SAY

Comments
Brian McLean says:
Ford continue to persue the Holy Grail of being a niche and a volume player at the same time !
25 Jun 2007 15:46:51

Click on the button to include your comments on this story