Ford Australia Territory Melbourne

It has been hinted at since last year, but now it’s official. Yesterday, Ford Australia finally announced the intention to cease its local manufacturing operations, ending production at the Broadmeadows and Geelong plants in October 2016. The closure will directly affect around 1,200 jobs at the two plants.

Production in Australia has been around since 1925, the company first assembling Model Ts in Geelong, Victoria. Ford Australia currently assembles the Falcon, Falcon Ute and the Territory SUV. The SZ Territory’s primary export market is New Zealand, though it is also being exported to Thailand in small numbers.

The decision on ending local manufacturing was driven by increasingly challenging market conditions, including market fragmentation and the high cost of manufacturing. Ford losses in Australia in the last five years have totaled approximately AUD$600 million.

Ford Territory Melbourne 1

The company announced an after-tax operating loss of AUD$141 million for the 2012 financial year. This follows a loss of AUD$290 million in 2011. Since November 2012, production has slowed from 209 vehicles per day to 148 vehicles per day, due to a lessening demand for larger vehicles.

Nonetheless, the company said that plans to launch updated versions of the Falcon, Falcon Ute and Territory in 2014 will continue.

Despite the end to local production, Ford’s presence in the country will remain significant, and Australia is currently one of four product development hubs for Ford globally. The Australian product development team – more than 1,000 strong – has been responsible for designing, engineering and testing global vehicles, including the Ford Ranger.