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Race hots up to be market’s number one

Ford of Britain and Vauxhall have been performing with the serenity of two swans while the parent companies have been handling crises around the world.

The two still share 26% of the UK market – a long way from 40% that they jointly held 20 years ago, but still a respectable outcome with so much strengthening opposition.

The latest SMMT figures show that there is just one serious concern for the pair and that is Volkswagen which had climbed to more than 8% year-to- date by the end of October. 

The question is: has Vauxhall got the power to move past Ford or will Ford maintain its historic superiority?

The gap between the two had been closing for 20 years. But in 2008 Ford decided to get busy and force Vauxhall off course. The gap between them was down to just under 1% for the first time. Last year it was back up to almost 4%. Vauxhall was down to 12.3% and Ford held at 16.2%. 

To the end of October this year 246,770 new Fords were registered in the UK giving it a market share just under 14%. Sounds good, but looks bad. Last year it was doing better having racked up 16.6% market share with 272,530 sales at this stage.

Ford has always paid attention to its leadership position and has used fleet sales as a way of managing that. Like all major fleet players, it has tried to get a bigger hold on the retail market and to reduce daily rental.

In fact Ford is neither first nor second largest supplier to fleet, according to figures for the first half of this year. While Vauxhall lifted its UK fleet sales as a percentage of total sales by 11% over last year to 62%, Ford decreased its position marginally to take 57% and was in third place. Unexpectedly, it was behind Audi at 59% for the half year and only just ahead of BMW on 56%.

Ford’s cautious approach to fleet has meant that Zafira outsold C-Max in the fleet market and Insignia beat Mondeo, though Focus was ahead of Astra.

Earlier in the year, the Vauxhall franchise board chairman was
on record saying that the big issue for the brand was customer satisfaction and both the JD Power Survey and the Which?Car survey were flashing red lights. Vince Courtney said communication was an issue and that Vauxhall did not talk to customers often enough. He thinks that communication should be made a continuous thing with customers – not just for a few days after purchase. Ford comes out five places better. 

Vauxhall has had quite a let-off in the UK during the period that parent company, GM, was in bankruptcy and reorganisation. Very few people in the UK knew that Vauxhall has anything to do with GM. In a survey, only 18% showed any recognition. In Germany, the sister brand Opel had 80% recognition as a GM subsidiary brand.

Much of the brand definition comes from Opel and to all intents and purposes, Vauxhall could be positioned as a German premium brand if it wanted to attract some reflected glory. But Duncan Aldred, the recently-appointed managing director in Luton, prefers the position he is in of having Vauxhall recognised as a senior UK player with some historic British design and manufacturing pedigree.

Vauxhall does not have a great deal of room for manoeuvre. A lot of money would have to be spent to arrange a new image and money is not plentiful at Luton. Currency has not been helpful, but then Vauxhall has rarely contributed to the group’s net trading profit. There was cost-cutting in the second quarter which led to a modest profit in the second half. Bottom line though remains red ink and 2011 will start with fingers crossed for a year of black ink.

Ford of Britain did announce a profit in 2009 after a heavy redundancy programme. But once cash was remitted to the US, the company had negative net worth. The commitment to faster product renewal was very clear in the accounts.

There will be a big difference in Ford and Vauxhall in the way that they promote electric vehicles. Vauxhall has been hawking the prospective Vauxhall Ampera around all year. 

Initially it will be an import from the US. Then in 2014 it is due to be made at Ellesmere Port. It is not a true electric car as it uses a petrol engine to recharge on the move, but it does have an electric recharge socket. Ampera, and Chevrolet Volt, will be a major device for GM in the UK to be able to pitch for its place as pioneer and ‘green’ producer.

But Ford remains sceptical about the significance of an electric car in the short term. Steve Odell, CEO of Ford Europe, said that EVs or hybrids together will be no more than 10% of the market in the year 2020. “There has to be a major change in industrialisation. We need major improvements in range, affordability, service ability and the availability of recharge points.”

Questionnaire show dealers give Ford the edge on Vauxhall

What do the dealers make of the rivalry between the big beasts in the UK market? The National Franchised Dealers’ Association survey, which publishes aggregated figures and therefore allows dealers to contribute anonymously, shows Ford ahead.

Ford is a lot fairer than Vauxhall in its supplying and stocking practices, according to this questionnaire. Ford scored 3.5 (out of 5) while Vauxhall trailed behind at 2.7. That Vauxhall score was a significant drop from the previous year’s approval rating. Ford was preferred for the efficiency of its target setting and once again the Vauxhall score dropped relative to the previous year.

There was a difference between the way the dealers of each brand regarded the arbitration process for target setting. Ford scored 3.1 (out of 5) which was slightly down on last year. Vauxhall by contrast moved up a little, but only to 2.6%.

Neither dealer body was very keen on the trend of its manufacturers’ product positioning (image, price and value). Ford dealers had previously scored its supply very high at 4.0, but dropped that to 3.6 this year while Vauxhall dealers pared its supply back from 3.7 to 3.2.

Ford is doing better with the frequency of its new models. Vauxhall has just been through a substantial renewal period so it might be expected to be happier, but isn’t.

There were a few areas where the Vauxhall dealers were the happier. They were just ahead of Ford on satisfaction with bonus and rebate rates and marginally ahead on their satisfaction with the quality of salesman application rates.
Labour rate was an issue where Vauxhall workshops actually cracked a grin. They were happier with retail labour rates than their Ford counterparts and even happier with their warranty labour rates.

The summary is that Ford wins it at a fairly easy canter. And while Vauxhall scores 6.3 out of 10 for the value of the franchise, Ford is a notch higher at 7.3. Interestingly, though – in both cases the scores are down on last year.

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