The UK car market may be showing volume growth, but it is also a very, very competitive market, according to Ford of Britain’s managing director Mark Ovenden.
Car sales in the UK in the first quarter rose by rose by 7.4% to 605,198 units, with the private retail part of the market – just under half of the total – up by 11%.
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“Retail is holding up very well,” says Ovenden. “And that’s good for us. Our retail share is up this year. And Ford Options is proving very popular with these buyers.”
Ovenden says that the number of customers buying on a ‘trade cycle’ basis with a flexible contract and finance such as those available under Ford Options is supporting the business. “It’s now accounting for over 80% of our retail business and customers are trading the cars in for new ones after 2-3 years,” he says.
Ford is the UK car market leader, but it’s a market that is highly fragmented – Ford leads with a share of 14% (Q1; second placed Vauxhall on 11.4%) and there is a long tail of other brands – one of the reasons why the UK car market has always been a highly competitive market environment.
Ford, in the first quarter, had the top two best selling models in the UK with the Fiesta (34,309 units) and Focus (25,081).
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By GlobalDataOvenden is pleased with the impact of the ‘new Fiesta’ (mid-cycle refresh, 1-litre EcoBoost engine added in Europe, shown at Paris last year and launched in Europe after that). “It is selling very well, helped by the addition of the EcoBoost Engine. Focus also continues to sell well.”
The retail and small business sector is also supporting Transit commercial vehicle sales. “It really is very strong,” he says. “We have the right vehicles in the right segments to meet user needs. And the Transit Custom [a mid-size van introduced last year that sits between the Transit Connect and Transit] is going very well. The Transit is in fact at number 7 in the top sellers list for all light vehicles – including cars – in the UK, a phenomenal achievement for a panel van.”
He also says that Ford is not pursuing low-margin fleet business. “Our share of the major daily rental market is now around 20%, which compares with 26% last year,” he says. “And keeping supply to that part of the market constrained is good news for residuals, too.”
“Don’t get me wrong. I like doing rental but we have to get the balance right. We are also doing a lot of buy-back from the rental companies now, and that’s also good because we can keep the vehicles in the Ford network.”
So, how does he see the Ford brand positioned in the UK?
“I’d like us to be seen as ‘premium volume’,” he says. “We are first and foremost in volume manufacturing but we want to be seen as better than the other volume brands out there.”
Ovenden also has broader responsibilities for representing Ford in the UK, as he is to become Ford of Britain chairman, with Joe Greenwell electing to retire from the end of this month. Ford does not manufacture cars in Britain now, but it is the market leader and makes engines here. It accounts for a significant swathe of employment and also makes a valuable contribution to the UK’s manufactured exports.
“Some 100,000 people in Britain rely on Ford for their employment, direct or indirectly in suppliers or dealers,” he points out.
On engines, there was an announcement earlier this week on increased work for the Bridgend plant. Ford Bridgend currently produces 2,668 four-cylinder engines each day, with exports to Spain, Sweden, Germany, Russia, Belgium and the US. This delivers an annual export value of GBP1.5bn when combined with other Ford UK operations. Employment at Bridgend will rise to 2,300 this year, the most in its 33-year history.
And Ovenden is quick to stress the importance of the UK as an engine producer for Ford.
“Around 30% of all Fords sold in the world have a UK produced engine and the engine accounts for around 35% of the value of a car, so that illustrates just how important the UK engine manufacturing – and design – operations are to Ford in a global context.”
