Mark Ovenden, Ford’s UK chief, tells Dave Leggett that he’s happy with the gradual improvement to the UK economy, the state of the British car market and market leader Ford’s position within it.
“This is a really exciting time for Ford in Britain,” says a cheery Mark Ovenden. The UK car market, let’s remind ourselves, is heading for 2.2m units this year. It’s a competitive market, but it’s a market seeing growth this year and a TIV (total industry volume) that is in line with historical norms. Ovenden knows that things are very much worse in markets on the other side of the English Channel. The Italian car market, for example, has been running at a seasonally adjusted annualised rate (SAAR) of a paltry 1.3m units. The situation in Britain is, by such a comparison, relatively good. Ovenden sees a macro picture that is, broadly speaking, positive.
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“The economy in Britain is slowly and gradually improving,” he says. “It’s not on fire, but it’s certainly starting to improve and that’s the way we would like it to be, a slow and continued gradual improvement.”
The private retail side of the car market has been driving the UK car market this year and Ovenden highlights the importance of positive consumer confidence.
“Consumer confidence is coming back and the strength of the retail market this year has been particularly encouraging,” he says, adding that “the exchange rate is benign, it could be better, but on the whole at a macro level, the economy is looking good.”
Ovenden also stresses the importance, for Ford, of having plenty of new and fresh product.
“As we said at ‘Go Further’ [event] in Amsterdam last year, we are planning to launch 25 new products in the next five years. So far we have launched eight of them in Britain – cars like the Fiesta, Fiesta ST, Transit Custom, 99g [per km CO2] Focus, Transit Courier…
“Next year we have the new large Transit, new Focus and new Mondeo.”
Ovenden says its particularly good to have fresh product in a market like the UK’s that is doing well and that having new product also can chime with the need to address market needs in the buoyant private retail sector.
Ford’s share of retail car sales in October was up 0.2 of a percentage point at 13.3%, compared with October 2012, and for the year to date retail share was 13.3%, up 0.9 of a percentage point versus the same period last year.
“That is fantastic when you consider that you normally work hard for increases of just one tenth of a percentage point. One percentage point is an endorsement of what we are doing with the brand, the ‘One Ford’ strategy and the product-led recovery in Europe.”
He singles out the Ford Fiesta model for particular praise. The UK was Europe’s strongest market for Fiesta sales during the first nine months of 2013, with more than 96,000 cars sold, followed by Germany, Italy, France and Spain. Fiesta also was recently identified as the best-selling sub-compact car globally, with 356,434 units registered in the first half of 2013, according to Ford’s analysis of Polk global vehicle registration data.
“Fiesta is an absolute phenomenon and holds 25% share of its segment in retail, an impressive performance when you consider there are probably twenty other rivals you could easily choose [as a car buyer]. It is a tremendous endorsement of one of the first truly global vehicles to come out of the ‘One Ford’ strategy.”
SUVs are an area where Ovenden sees a need for more Ford product over the next few years. “We have just had the Kuga. The Kuga has done very well, but we need more than that one model in the segment. Over the next couple of years we’ll be adding the EcoSport and then the Edge to strengthen our presence in SUVs.”
Ovenden says the Ford dealer network has been helped by the higher profits that come with the focus on retail business. “We believe our network is strong and our dealers are attracted to our future model cycle plan, the commitment to bring in 25 cars in five years. They can see that we are walking the talk in terms of the eight new models we have already brought in and next month, in Barcelona, they will see the next instalment that is coming.”
Coming back to the importance of the private retail side of the car business in Britain, Personal Contract Purchase (PCP) consumer finance schemes have become very important. Some car brands in the UK have said that as much as 80% of their retail business is now conducted through PCP arrangements.
“Our PCP business is high and growing and Ford Credit is a big strategic strength for us. It’s interesting to note that a few years ago so many ‘experts’ were saying that Ford should divest Ford credit. It was a smart move for us not to do that. We can focus on two or three year trade cycles to benefit both the customers and dealers.”
Ovenden won’t reveal a figure for the percentage of Ford’s UK retail business that is PCP based, but it’s a clear majority. “Let’s say it’s an overwhelming majority,” he admits.
