Ford's production capacity stretched

The 'end' of the Global Financial Crisis and a facelift for the Ford Territory have conspired to leave Ford red-faced on the production front.

Previously a vehicle being built one at a time, as Ford dealers received individual orders, the Territory is now experiencing levels of demand forcing Ford to revisit production of the SUV, while production priority for the base-grade Falcon XT has been downgraded.

"The big challenge that we have, as Ford, is to keep the supply to our dealers," said Ford President Marin Burela today.

"We're seeing already, in November, that there's huge demand for certain product lines -- our Territory, for example.

"The biggest issue we have on Territory... is that we do not have enough supply out in dealer world, so we're working very hard to be able to provide more product... but we're basically turning over our Territory stock in the dealer [inventory] a hundred per cent on a monthly basis. This is an unprecedented area, in some cases, for the automotive industry.

Curiously too, Burela points out, the Territory being purchased today is not the same type of Territory being ordered a year ago. With just the facelift in the meantime, the locally-built vehicle is apparently appealing to a more affluent demographic -- something true of the Falcon as well.

"Our Territory situation is an exciting one," remarks Burela. "The vehicles that we are now selling are pretty much in the mid-series and high series, as opposed to where we were 12 months ago, which was predominantly the entry-level car.

Burela says that the plant at Broadmeadows is building the Territory fast enough to meet demand in a reasonable time -- which suggests the SUV is still being built to individual order, but not apparently fast enough for some buyers.

"What we've been very focused on doing is making sure we can get the car through the system -- from build to dealer -- in a very efficient and streamlined process. We've been doing that very effectively. The big challenge that we have is that I think we're actually losing sales, because we don't have enough vehicles in the right location at the right time to meet the enquiry rate and the demand rate -- and we're actually fixing that by injecting more product into the system over the next couple of months."

The Ford plant is currently building between 270 and 280 units a day, says Burela, and the company is looking at ways of improving on that between now and the end of the year. He also said that while there are no non-production days for the plant this year -- or the next -- he's not yet quite so optimistic about Ford's sales over the next 12 months that the company will introduce overtime for its production staff.

"We have the ability and the flexibility to rebalance very quickly, if we need to, but at this point in time, we're very comfortable with where we are."

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