By John Griffiths, industry correspondent
IT’S now a year since Mark Ovenden came in from the cold – well, Russia anyway – to take over the reins of Ford of Britain.
It was quite a contrast: from nearly three years of being at the helm of Ford of Russia in a fast-growing market expected soon to be Europe’s largest, to a deficit-obsessed, moribund UK economy with business confidence evaporated and a new car market badly stagnated.
It remains a toss-up for Ovenden as to which represents the greatest challenge.
The ratings agencies are watching the Government like a hawk and we just can’t afford to lose that AAA rating
“The government’s under real pressure to come away from austerity. But I don’t think they’ve got the choice to do that. The ratings agencies are watching the Government like a hawk and we just can’t afford to lose that AAA rating. And it’s the right thing to do; the debt at both a public and private level absolutely has to come down.
“And to me, the consumer is basically at the end of the food chain. You need the economy to start to stabilise, you need businesses to start to invest , you need people to have more confidence that they’ve got their jobs – and once you get to that stage people will more naturally go out and make major purchases.
“Even so, the entire world isn’t in recession. There are still businesses and people out here in Britain spending money . So you can say to yourself : ‘it’s all so depressing I won’t get out of bed this morning’; or you can say: ‘ yes, it’s tough; but we’re going to plough our way through it.’
Ford must be among the winners
“At the end of this crisis there will be survivors; there will be winners and losers and we, Ford, have simply got to make sure that we are among the winners. And the key to that first and foremost is product. We are a totally product-driven industry . “
Ovenden has the confidence in his assertions which comes from having been several times around the Ford block: past senior roles have included Ford of Britain marketing director, Ford of Europe brand manager, and marketing stints both at Dearborn HQ and Cologne.
Outside of the room in which he is outlining his thoughts to BCM , in the streets of Munich and the surrounding Bavarian countryside, Ford’s innovatory small, Fiesta-based B-Max people carrier is busy making his product development point.
Motoring hacks are giving various versions a thorough work-out before its September on-sale date. (A detailed appraisal of the B-Max, with its unique pillarless easy-access interior, is carried elsewhere in BCM: Ford’s new B-Max – the small little big car.)
Ford – driven by product development
Ovenden almost thumps the table in his earnestness: “The easiest way to get through a crisis would be to cut your product development. But when Ford overall was staring into the abyss in 2008 the one thing we were adamant about was that we would cut anything and everything but we would not cut product development. And that continues.
“Clearly the industry is in contraction. Revenues are down and volumes are down and every manufacturer has to look to make savings. But you just can’t cut product development. Fiat has just announced that it is putting back the next Panda two years or similar; but given the importance of the B sector that is, for example, something that we would try very hard to avoid doing,”
Considering that the next generation of the Mondeo, once considered the UK’s mainstay business user car, has been delayed until towards the end of next year – it was originally planned to go on sale next March – that might sound a bit rich. But Ovenden insists that the delay has nothing to do with budget cutbacks.
The next Mondeo is a ‘world’ car, the US version of which, the Fusion, was unveiled at January’s Detroit motor show. Modifications to meet European tastes, legislation and quality perceptions are simply proving more complex and taking longer than expected in preparation for the start of production at Genk in Belgium. Ford still expects to show the final European version at the upcoming Paris motor show (September).
The threat from Korea – and China…
All this is taking place under ever-increasing pressure from relatively new entrants like Hyundai and Kia with the Chinese still to come. “Yes, they’re also making life a lot more difficult. But we’re not making the mistake twice, like we did in dismissing the Japanese in the 1960s and 1970s. I’ve come away from my time in Russia knowing that Asian brands have got 35 per cent of the Russian market. We’re fully aware of the threat that people like Kia and Hyundai pose and that the Chinese are yet to come. But we’re also confident that we’ve got the product line-up to fight our corner. “
The next Mondeo has an uphill task, however. By last year its sales dwindled to around 20,000 – less than half BMW’s ‘premium’ 3-Series and far behind the sector leader in the UK, the Vauxhall Insignia. Despite this, Ford’s share of the fleet and business user market has increased this year thanks largely, says Ovenden, to growing acceptance of the smaller Focus.
“The new Focus is being widely bought into company car fleets and has been helped further by the introduction of the EcoBoost engine.
The frustration is that the Mondeo is such a good car – yet the premium car makers dominate that sector of the market
“And when you think about the kind of Mondeo numbers we used to talk about (around 100,000 a year at their peak) and then take the interior of the Focus, it’s pretty much the same size as the Mondeo . So segments keep evolving, and so just because Mondeo’s only doing 20,000 units a year at the moment that’s not a reason to say the Mondeo’s unsuccessful. I don’t think it is and it remains an important part of our line-up.
“It’s been a bloody good car from the moment we launched it. The challenge comes in when it comes to branding. It’s a frustration with Mondeo that it is such a good car and that the so-called premium brands which dominate the C/D fleet car sector are arguably no better than the Mondeo and in some cases worse.
“The problem is the company car and business user’s sense of aspiration towards those other brands and that is something on which we have to continue to work. If you want exclusivity now you should probably buy a Mondeo rather than a BMW 3 Series. But no one ever said that life would be fair. All we can do is keep on. So far bringing out stunning models and believe that eventually the penny will drop.
Ford and the large car market
“The other point about Mondeo is that we should really lump Mondeo and S-Max together because they both compete in the C/D segment. And Galaxy, too, even, because they all come off the same platform. And so then you’re up to 30-35,000; so overall in the large family car market we’re getting a reasonable share. And of course there’s a lot more company car choice around – it’s all a far cry from the days when you could have a Cortina or have nothing.”
With a new Kuga small SUV and the first revamp of the Fiesta – currently the UK’s biggest selling car – due by the end of this year – Ovenden says he expects to have no problem retaining or improving on Ford’s current 14.1 per cent UK market share. It remains, as it has been for years, the UK’s market leader by brand.
However, group Volkswagen’s various brands together and Ford drops into a distant second place.
Ovenden is slightly more optimistic than the SMMT in terms of how the UK market will perform this year, predicting 2-2.1m units compared with the SMMT’s recently raised forecast of 1.97m and comparing with an actual market of 1.94m last year.
“And until such time as the European manufacturers address the over-capacity problem the market will continue at that level.”