October 2010 vehicle sales results

[bobthebilda]

Originally Posted by Joe5619

http://www.goauto.com.au/mellor/mell...25779000148834

Not even Mazda (private kings) has made a profit % greater than 5% in the past 10 years, but you except Ford to make 12%??

Our 2 leading import only companies are not making big bucks!! And the dont souce from expensive Europe like Ford currently does!!

Joe, unfortunately you have mixed up profit on an investment, compared to profit from revenue. The previous threads have been in regards to what profit Ford OZ has (and will) reap from its investments (spending on capital equipment etc) in australia.

In the article, it is talking about the profit mazda and hyundai derive from their sales. More than likely, the overseas head office, sells the cars to the local offshoots (making a profit on their investments overseas) , who then sell the car for a (nother) profit, here in australia. As australian sales probably dont account for a great deal of these companies production, then they are far more likely to chase market share, than to worry too much about a large percentage of profit from the revenue (as long as its a profit). In fact, it is very common for large strong companies to carry out predatory pricing (selling at a loss), to destroy the competitors.

[naddis01]

Originally Posted by jpd80

What about FoA's other income:
1) $700 million for design of the T6 Ranger
2) now working on the Everest SUv worth another $200 million
3) plus designing Figo for India
4) plus working on a small car for Chinese market..

These are only the projects we know about...

Oh, Casting plant's major brake parts contract, wasn't that worth around $1 billion?

All of that is great, don't get me wrong, but at the end of the day if manufacturing is not making a decent return on investment they won't continue doing it. Its great saying they have all this income, but on its own it is meaningless. What were the costs on these projects?

It does look as though they can make more money in designing than they can in manufacturing but surely they go hand in hand. If it came to the point were manufacturing was to cease then would there be a case to continue having a design studio (without local manufacturing) in Australia?

As you said Ford obviously know more than we do. They are the ones who determine if they are acheiving the required return on investment and if local manufacturing is worthwhile. One would assume though that with the current exchange rate the Ford imports should be making money, but again that is an assumption.

I hadn't mentioned Holden but now that you mention it Ford's profit of 13 Million in 2009 really made up for the 274 million loss in the previous year (as well as the 3 other losses it made before that) and must be of great releif to them.


On a side note I thought we might reflect on some comments from Marin Burela from only 6 months ago.

http://www.theaustralian.com.au/busi...-1225863311745

"We have turned the corner," Mr Burela said. "This will be a solid year for Ford Australia.

"Our expectation is 15-20 per cent growth in sales of local product in 2010."

Together with increased deliveries of imports, Mr Burela expected a 10 per cent increase in overall sales. However, this is about half the rebound in the overall market, with the latest sales figures showing growth of 20 per cent year-to-date.

Anyway, I know my comments probably sound very negative but, going back to my intial post in this thread (it has somehow morphed into a discussion on return on investment et al), all I was trying to say is that Ford seem to have a problem with reading the market and what it wants. If that continues and large car sales continue to decline at some point the hard decision may have to be made. All that we can hope (and can only assume will happen) is that the Falcon will become part of the GRWD platform or similar.

[burnz]

Originally Posted by Joe5619

http://www.goauto.com.au/mellor/mell...25779000148834

Not even Mazda (private kings) has made a profit % greater than 5% in the past 10 years, but you except Ford to make 12%??

Our 2 leading import only companies are not making big bucks!! And the dont souce from expensive Europe like Ford currently does!!

i have to ask, what car does ford import/source from europe??

[jpd80]

Originally Posted by burnz

i have to ask, what car does ford import/source from europe??

Higher series Fiesta, higher series Focus, all Mondeos, all Transits.
Think all the desirable models dealers can't get their hands on readily.


Pretty soon, most affordable cars in this region will be built in Thailand or Korea,
Asian car makers pick the cheapest countries to build vehicles and Ford is becoming
just like the rest of them......

[Joe5619]

Originally Posted by bobthebilda

Joe, unfortunately you have mixed up profit on an investment, compared to profit from revenue. The previous threads have been in regards to what profit Ford OZ has (and will) reap from its investments (spending on capital equipment etc) in australia.

In the article, it is talking about the profit mazda and hyundai derive from their sales. More than likely, the overseas head office, sells the cars to the local offshoots (making a profit on their investments overseas) , who then sell the car for a (nother) profit, here in australia. As australian sales probably dont account for a great deal of these companies production, then they are far more likely to chase market share, than to worry too much about a large percentage of profit from the revenue (as long as its a profit). In fact, it is very common for large strong companies to carry out predatory pricing (selling at a loss), to destroy the competitors.

Again, you have COMPLETELY mis-understood what a profit means!!!! If Ford makes a profit (over a longer period & not just one year), then they have recouped every single cent they spent in this country plus more (ie the return part)!!

So Holdens exports are useless to Holden using your line of thinking!!

But hey, I'll just shut up now, becuase I dont know what I'm talking about & get back to my day job.. Which just so happens to be in accounting!!

[Road_Warrior]

Originally Posted by jpd80

What about FoA's other income:
1) $700 million for design of the T6 Ranger
2) now working on the Everest SUv worth another $200 million
3) plus designing Figo for India
4) plus working on a small car for Chinese market..

This isnt income. These are funds that are allocated as part of Ford's global product development budget. If anything, the monies appropriated to these projects are expenditure. It's not Ford Australia's money that's being spent, however.

[bobthebilda]

Originally Posted by Joe5619

Again, you have COMPLETELY mis-understood what a profit means!!!! If Ford makes a profit (over a longer period & not just one year), then they have recouped every single cent they spent in this country plus more (ie the return part)!!

So Holdens exports are useless to Holden using your line of thinking!!

But hey, I'll just shut up now, becuase I dont know what I'm talking about & get back to my day job.. Which just so happens to be in accounting!!

whooooaaaaa talk about sliding from one story to another. You were quoting what poor profits hyundai and mazda OZ were making on their sales, to what profits Ford OZ were making on their investments. Completely different. If you get 5% on a $100 million factory investment, you make $5 million a year. If you get 5% on 10,000 sales of a $10,000 car, you get $5 million. One investment requires $100 million to make the profit, the other in theory (and yeah i know it doesnt work that way in reality), requires the same $10,000 being used over and over again.

So now you've gone back to Holden. Well I think Holdens own statements prove that their exports are useless in trying to run a sustainable company (not losing money). They merely seek these markets to keep cars going thru the factory.

No one is seeking you shut up, its a public forum (where people are allowed to express their opinion). But in consideration for the company you work for, if you spent more time on these forums, and less time doing their accountancy, then i think it would be best for the company if you spent more time in the forums.

[jpd80]

Originally Posted by Road_Warrior

This isnt income. These are funds that are allocated as part of Ford's global product development budget. If anything, the monies appropriated to these projects are expenditure. It's not Ford Australia's money that's being spent, however.

While it's true that funds are allocated, we also received a lot of new infrastructure as well
There's only about 16 countries in the world capable of developing vehicles from scratch.
I'm so glad Australia is one of the few....

[Joe5619]

Originally Posted by bobthebilda

If you get 5% on a $100 million factory investment, you make $5 million a year. If you get 5% on 10,000 sales of a $10,000 car, you get $5 million. One investment requires $100 million to make the profit, the other in theory (and yeah i know it doesnt work that way in reality), requires the same $10,000 being used over and over again.

Could you please define what you mean exactly by 100 million dollar factory? Are you talking about the building itself, the machinery inside, the R&D required? Personally, I think you are making some series mistakes on where costs are allocated & accounted for in financial statements!

[jpd80]

Ford and Holden have about $2 Billion to $2.5 billion in sales of local products,
the fact that both turn tiny losses in comparison to the overall figures tells me
that the money is being worked out very carefully.

Not suggesting anything illegal is going on but it is possible to transfer some costs back to other centres.
Eg, Holden's Mexican V8 engines could well be made dearer to keep profit in Mexico.

It's not hard to see how supply from other areas could see the profit redirected to other places.

[Road_Warrior]

Well of course for an operation the size of a car manufacturer, you would need to engage in some creative accounting to make sure all of your operational arms and business units share the burden so that one project or business unit doesn't look like one big massive fail. Like the $800 Million spent on developing the FG for example: some of that development cost went into tooling and plant upgrades. So the costs are not just spread out over the lifecycle of a particular product, they are amortised into fixed assets in the plant as well.

Getting back to budget allocations and the T6 program, another net result of those funds being allocated, having been expenditure from Ford's global budget, is that it was allocated to FoA and contributed to FoA's cash flow - I don't think that cash flow contribution can be underestimated when talking about the bottom line.

[bobthebilda]

Originally Posted by jpd80

Ford and Holden have about $2 Billion to $2.5 billion in sales of local products,
the fact that both turn tiny losses in comparison to the overall figures tells me
that the money is being worked out very carefully.

Not suggesting anything illegal is going on but it is possible to transfer some costs back to other centres.
Eg, Holden's Mexican V8 engines could well be made dearer to keep profit in Mexico.

It's not hard to see how supply from other areas could see the profit redirected to other places.

And thats exactly what they do JPD. Toyota got pinged for this from the tax office just this year, thus part of the reason for its loss

http://www.goauto.com.au/mellor/mell...257758001172B8

If toyota australia buy a hybrid engine from toyota japan to put into a locally made product, they will want to make the most profitable part of the transaction to happen in the lowest taxed country. If low taxes in japan, they will slug oz for a higher price for the engine (making smaller or no profit in australia, and bigger in japan). It is illegal, but the ATO doesnt have the resources to verify all the activities, and especially how to determine the true cost of something.

And sometimes the ATO employ accountants, who have no idea what they are doing.

[bobthebilda]

Originally Posted by Joe5619

Personally, I think you are making some series mistakes on where costs are allocated & accounted for in financial statements!

Dont think i need to explain, because i didnt mention anything about where costs are allocated and accounted for in a financial statement.

[jpd80]

Originally Posted by bobthebilda

And thats exactly what they do JPD. Toyota got pinged for this from the tax office just this year, thus part of the reason for its loss

http://www.goauto.com.au/mellor/mell...257758001172B8

If toyota australia buy a hybrid engine from toyota japan to put into a locally made product, they will want to make the most profitable part of the transaction to happen in the lowest taxed country. If low taxes in japan, they will slug oz for a higher price for the engine (making smaller or no profit in australia, and bigger in japan). It is illegal, but the ATO doesnt have the resources to verify all the activities, and especially how to determine the true cost of something.

And sometimes the ATO employ accountants, who have no idea what they are doing.

Exactly.
If the profit transfer is done with subtle hand, a few thousand profit
per car can be shifted quite easily and dare say legally...

That's why I really wonder some times that the profit/loss quoted is more
about locals getting more government assistance....but maybe I'm cynical.

Interiors are supplied from China, who says we don't get charged a higher
price for Falcon and Commodore while Chinese Fords and Buicks sourcing
similar interiors get bulk discounts in a complex profit swap worked out in
board rooms and accountants dens....

Lots of other Chinese parts go into Ford and Holden as well....

[jpd80]

Originally Posted by Road_Warrior

Getting back to budget allocations and the T6 program, another net result of those funds being allocated, having been expenditure from Ford's global budget, is that it was allocated to FoA and contributed to FoA's cash flow - I don't think that cash flow contribution can be underestimated when talking about the bottom line.

It also allowed Ford to eliminate Mazda's Engineering costs by keeping all the expenditure in house,
that 's $700 million that stays here and a portion of that is also now paid by Mazda for the BT50.

If Mazda paid like $300 million, then Ford have done amazingly well.....

[Joe5619]

Originally Posted by bobthebilda

Dont think i need to explain, because i didnt mention anything about where costs are allocated and accounted for in a financial statement.

Well... if you dont understand that, you can't understand any companies "investment" amount! Inventory (which is your COGS after you have sold it) is an investment for all companies no matter if you bought a finished product or built the think yourself! You seem to be ingoring a few "investment" costs for import only businesses.

[Road_Warrior]

Originally Posted by jpd80

It also allowed Ford to eliminate Mazda's Engineering costs by keeping all the expenditure in house

Aah yes, I remember that little hissy fit.

[jpd80]

Originally Posted by Road_Warrior

Aah yes, I remember that little hissy fit.

What was it:

"Ford engineers lacked the maturity of design experience to successfully complete the project..."

No wondering why those T6 mules had a awfully rough BT50 front plastered on them,
it was a red hot dig back at Mazda's engineers for being as the Kiwis say, prucks....

[phillyc]

Originally Posted by jpd80

What was it:

"Ford engineers lacked the maturity of design experience to successfully complete the project..."

No wondering why those T6 mules had a awfully rough BT50 front plastered on them,
it was a red hot dig back at Mazda's engineers for being as the Kiwis say, prucks....

That's funny. Yet it is the Mazda designers which have made the ugly (externally) version. Inside both are good looking.

[Road_Warrior]

Originally Posted by jpd80

What was it:

"Ford engineers lacked the maturity of design experience to successfully complete the project..."

No wondering why those T6 mules had a awfully rough BT50 front plastered on them,
it was a red hot dig back at Mazda's engineers for being as the Kiwis say, prucks....

That's the one. Heh.

[naddis01]

Ok guys, to break things up a little, I thought I would post some interesting figures.

Figures are YTD October 2010.

Ford Falcon - 25,209

XR6 - 11,470
XT - 3,449
BASE - 2,917
G6 - 2,516
G6E - 1,656
XR6T - 1,453
G6ET - 941
XR8 - 319
F6 - 271
GT - 139
F6-E - 38
GT-E - 18
GT-P - 22

Holden Commodore - 38,407

OMEGA - 15,645
SV6 - 10,968
SS V - 3,269
SS - 2,258
CALAIS V - 2,024
BERLINA - 1,705
CLUBSPORT - 1,016
CALAIS - 788
GTS - 490
SENATOR - 138
HSV TOURER - 103
W427 - 3

Mazda Mazda6 - 6,534

CLASSIC - 3,300
LUXURY SPORTS - 1,395
LIMITED - 581
TOURING - 463
DIESEL - 384
LUXURY - 214
DIESEL SPORTS - 115
SPORTS - 82

And for those interested, here is the buyer type split betweem Falcon, Commodore and Mazda6...

Ford Falcon

6,254 or 25% - Fleet
5,654 or 23% - Rental
4,893 or 19% - Private
3,686 or 15% - Large fleet
2,863 or 11% - Government
1,054 or 4% - Other
805 or 3% - Not for profit

Holden Commodore

12,474 or 32% - Fleet
9,947 or 26% - Private
5,719 or 15% - Government
4,317 or 11% - Rental
3,065 or 8% - Other
2,574 or 7% - Large fleet
311 or 1% - Not for profit

Mazda Mazda6

4,202 or 64% - Private
1,872 or 28% - Fleet
238 or 4% - Other
114 or 2% - Government
108 or 2% - Large fleet

[jpd80]

Just curious, in Falcon what is BASE - 2,917

Are they fleet cars, or basics sent elsewhere for completion or conversion?

[naddis01]

Not sure. Could be BF3 wagons?

Also interesting to note the FPV sales. I am guessing that the V8 buyers have been holding out for the 5.0 since the turbos have outsold the V8's so far this year.

[bobthebilda]

Naddis, you have 1116 Falcon and Commodores going to not for profit. I would have thought that all falcons and commodores were made not for profit (only joking).

You would think the only categories they arent getting screwed down on prices would be the small fleet and private sales. That leaves falcon with 11908 (48%) and commodore with 22421 (58%) in this category, whereas the mazda 6 has 6074 (92%) in this category. Some of those numbers certain would make one think before launching an extensive advertising campaign to try and woo the general buying public.

[jpd80]

Originally Posted by bobthebilda

Naddis, you have 1116 Falcon and Commodores going to not for profit. I would have thought that all falcons and commodores were made not for profit (only joking).

You would think the only categories they arent getting screwed down on prices would be the small fleet and private sales. That leaves falcon with 11908 (48%) and commodore with 22421 (58%) in this category, whereas the mazda 6 has 6074 (92%) in this category. Some of those numbers certain would make one think before launching an extensive advertising campaign to try and woo the general buying public.

Compared to Ford's figures, Holden appears to sell roughly 12,000 more Omegas
and about 3,000 more mid and high series.

That's a interesting puzzle to know whether those Omega sales are worth it,
but Ford would be chuffed if they could sell another 12,000 XTs into fleets.
Maybe Ecoboost will open up Govt. 4 cylinder only and CO2 sensitive fleet sales

[vztrt]

Originally Posted by naddis01

Also interesting to note the FPV sales. I am guessing that the V8 buyers have been holding out for the 5.0 since the turbos have outsold the V8's so far this year.

Will be interesting to see the figures after nov/dec.

[naddis01]

Originally Posted by vztrt

Will be interesting to see the figures after nov/dec.

I think we can predict what will happen as long as supply matches the demand.

[vztrt]

Well they better make extras as there will be a Christmas shut down.

[Road_Warrior]

Originally Posted by jpd80

Maybe Ecoboost will open up Govt. 4 cylinder only and CO2 sensitive fleet sales

It should do, dependent on its actual tailpipe emissions. The WA Government StateFleet vehicle matrix uses tailpipe emissions as the primary criteria for replacing fleet vehicles. So if it comes in equal to the 4cyl Camry (and is priced accordingly) I can see plenty of Camrys being given the heave ho.

And rightly so, they're horrible, horrible cars.

[jpd80]

Originally Posted by vztrt

Well they better make extras as there will be a Christmas shut down.

Those buyers wanting the new S/C V8 have probably already ordered them and
since there are quite a few down days scheduled between now and Christmas,
I'd say the numbers aren't all that flash but we'll see soon enough.....