The Classic Ford Falcon 1960
For over 65 years, Australia’s car market was dominated by two domestically made brands, Holden and Ford Australia. Australia was very active in car development from the early years of the industry, sometimes even ahead of overseas competition. Historically, manufacturing cars domestically made a lot of sense because of Australia’s isolation.
Holden and Ford in Australian culture
For many years, the Holdens and Fords were so dominant in the Australian market that they made their way into the national culture. Owning either one was not just a practical decision – it was a thing of pride and competition, passed down from father to son. As a person in the 80s or 90s, you were either a Holden guy or a Ford guy.
A recent turn of history
But in the recent years, the market has taken a turn in a different directions. As smaller, lower-cost, more fuel-efficient imported cars flood the market, large Australian-made cars are becoming significantly less popular.
Earlier this year, for the first time in its history, Holden was not included in the top three selling brands in Australia. As of March 2013, Toyota, Mazda and Hyundai have taken the top three spots respectively. A few months later, Holden unveiled its brand new VF Calais, with a price tag of only , to stay competitive in this tough market.
Ford to stop car production in Australia
With major car manufacturers opening factories in countries like Thailand, it is becoming less and less profitable to produce cars locally. In May 2013, Ford announced that it will be pulling out its manufacturing out of Australia by 2016, and seizing production of its famous Falcon series, as well as Falcon Ute and Territory. After having incurred a total of $600 million loss after taxes over the last five years, it has become clear that manufacturing cars in Australia is no longer profitable for this giant. This is despite the $1.1 billion of state and federal funding Ford has received over the last 12 years. However, this doesn’t mean that Ford cars will no longer be available in Australia. On the contrary, Ford is expecting to increase the availability of new cars by 30% by 2016, with imported models like Focus, Ranger, and Kuga. Ford has also stated a commitment to expanding its service program.
Will Holden follow suit?
This piece of news from Ford seems to have shaken things up at Holden headquarters. In May, Holden seemed to be keeping on despite its falling sales, and stated that it is planning to be making cars in Australia into 2022. But in June, the tune has changed as Holden boss Mike Devereux stated: “If we don’t accomplish (factory worker pay cuts), it is highly likely we will not make cars in this country. We have to reduce the cost to make each car, which is too high. If we keep losing money making cars, we won’t be able to make cars here any more. The cost base is too high, it is unsustainable.” A Holden representative also stated that the company has been taking a loss on locally built cars in the recent years, and is only able to sustain a total profit because of imported models.
What the future holds for these old favourites
As much as Ford and Holden have become a part of the Australian culture, the pragmatics of the business will have to take over sooner or later. As more lower-cost imported models flood the market and large Australian-made cars go out of favour with the general public, justifying local production will become less and less reasonable. As many empires eventually tumble, the long reign of Commodores and Falcons is coming to an end. As they make way for Corollas and Mazda 6’s, these old favourites will likely still retain a small following. In several decades, the out of production Falcons may start appreciating again as they move into the “classic” car category, and may become highly sought after by collectors and museums.
