Ford SA won’t get into ‘price war’ with Chinese brands
The head of Ford in South Africa says the Blue Oval brand won’t get into a “price war” with the Chinese, suggesting such a scenario would result in “a race to the bottom”…
Neale Hill, President of Ford Motor Company Africa, says while it’s “important to be competitive from a price perspective”, the Blue Oval firm won’t engage in a “price war” with Chinese brands as this would quickly devolve into “a race to the bottom”.
Speaking to Cars.co.za at Naamsa’s South African Auto Week 2024 in Cape Town, Hill said the Chinese were “always going to be a threat to the global market”.
“We are seeing an influx of Chinese competitors. The reality is, they were always going to come. I was fortunate enough to have lived in China in 2009 and could see what was going on. The installed capacity that they were putting in was always going to be a threat to the global market.
“They’re innovating very quickly – they’re extremely nimble – and they are going to challenge the industry. We cannot be a dinosaur and not react and not innovate. We have to make sure that as a brand we continue to provide the real value to our customers of what a company that is 120 years old globally – and 100 years old in South Africa – means,” he told us.
Hill, who has been with Ford for nearly 34 years, suggested that the Dearborn-based brand would differentiate itself not only through its products but also thanks to its service offerings.
“We have to fight for our slice of the market. Is it going to be tough? Yes, it is. But if I look at the engineering, the services that we’re offering our customers, and the convenience? That’s where we can win.
“Your products, at the end of the day, are going to be very similar. Whether it’s built in China, designed and engineered in China, or done so in America or elsewhere in the world, you’re still selling a product. But it’s how you back it up and how you support your customers that’s going to be a key brand differentiator,” he added.
When asked if this customer experience was more important than price, Hill said: “Price determines value for money. We’re changing the conversation to value of ownership”.
“Price can be easily matched. The quality of the product that you’re providing and the ownership experience that you’re providing is a lot more long lasting that the price you pay. For example, if I can tell you that you don’t need to come to a dealership to have your car serviced; I’ll bring a technician and a mobile service unit to your house and I’ll service it in your driveway – and I’ll be done in 40 minutes. That makes a difference,” he said.
Hill went on to say that should established brands engage in a “price war” with the market’s new Chinese entrants, the customer would benefit only in the short term.
“Price is always going to be a challenge to meet. I think all of us recognise that as soon as you get into a price war, it becomes a race to the bottom. Yes, the consumer wins – in the short term. The question is, what do they get when they trade their vehicle in and when they go onto the next vehicle, have they actually got value in the vehicle that allows them to continue that ownership cycle and that ownership experience?
“So, yes, it is important to be competitive from a price perspective, but I think it’s also looking at the holistic package that you’re putting in front of the customer. How the vehicle performs, how the vehicle drives, but also the support that you get in terms of looking after a customer.
“What we are trying to do is … be competitive on price – it’s also about the features and what we put into our vehicles – but it’s also going to be about the holistic package that goes beyond just the price that you pay when you buy the car,” Hill said.
Year to date over the opening 10 months of 2024, Ford has registered 27 088 new vehicles (21 381 of which were Ranger bakkies) in South Africa, representing year-on-year growth of 7% and seeing it rank 4th – a position higher than it achieved in 2023 overall.
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