Ford to end 90 years of Australian car production

After an AU$141 million loss, Ford Australia president and CEO Bob Graziano has announced that the company will cease local manufacturing in October 2016.

After an AU$141 million loss, Ford Australia president and CEO Bob Graziano has announced that the company will cease local manufacturing in October 2016.

(Credit: Ford)

After announcing financial results for 2012 at an AU$141 million loss, with five-year losses reaching AU$600 million, Ford Australia has announced it will cease local car production in October 2016.

"We are proud of our role in Australia, and we haven't made this decision lightly," said Graziano in a press conference held on Thursday morning in Melbourne. "All of us at Ford remain committed to our long history of serving Australian customers with the very best vehicles that deliver cutting-edge technology at an affordable cost. Unfortunately, due to challenging market conditions, we are unable to do that longer term while continuing to manufacture locally."

The decision will see 1200 staff made redundant from its Victorian manufacturing plants.

As part of the announcement, Ford Australia pointed to the local competitive landscape as a critical factor in the business review and final decision to end local production.

Australia has annual sales of approximately 1.1 million new vehicles, and customers have access to more than 65 brands and 365 models available for sale. This makes Australia one of the most competitive and crowded automotive markets in the world.

Given the fragmented marketplace and the low model volumes that result, we decided that manufacturing locally is no longer viable.

While the plan will see no more local production, it will see an increase in the range of vehicles that Ford sells in Australia, with Graziano suggesting a "more than 30 per cent" increase in range.

As well as general sales and service operations, Ford Australia confirmed that it will continue to run research and design operations in Australia. The Ford Design Centre in Melbourne (which CNET Australia visited last year) forms one of four global centres of excellence for the company's design operations.

"Ford will remain a significant employer in Australia, with more than 1500 team members," said Graziano. "The Australian team's role as a global centre of excellence for vehicle development also will continue to be an important focus for us."

After beginning Australian production in 1925, Ford's Australian production line will cease after more than 90 years of operations.

 

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