INTERVIEW | Catching up with Ford SA boss Neale Hill

In October 2021 Neale Hill took the helm as president at Ford Motor Company Africa. Hill has spent more than three decades with the firm, his last role as Ford Motor Company Southern Africa MD. We had the opportunity to glean insights during a face-to-face interview recently.    

Taking the helm 

Among the successes he counts since taking the chair is working closely with government to secure investment from Ford global towards production of the new Ranger at the Silverton plant of $1bn (about R16.21bn).   

“That gave us the opportunity to completely transform our facilities; then there was another R600m that went on top of that, part of the investment for the Struandale engine plant.”   

Hill is especially proud of the jobs the investment created.    

“Everybody talks investment, but what is the meaningful impact it has on the SA consumer, on the SA economy, and, most importantly, SA citizens? The whole way through, we've stressed how we can give back to the community and be a key part of it.”   

Part of the development included government efforts in establishing the Tshwane Automotive Special Economic Zone (TASEZ). According to Hill, as much as 45% of allocated work at the Silverton plant has gone to local communities such as Mamelodi, Nellmapius and Eersterust.    

The investments also helped secure export contracts, with installed capacity initially announced at 168,000 units, then to 200,000 units. “That, for me, is the legacy we're going to leave for the SA consumer and the SA market and, most importantly, local people that work in our plant.”   

He is pleased with the steps Ford has taken in empowerment, diversity, equity and inclusion, adding that the company has clear transformation objectives. From a social responsibility perspective, a recent initative he touted is a partnership with the Thembekile Mandela Foundation. The project saw a donation of school shoes and bags to 1,150 pupils at Clarkebury Agricultural School in the Eastern Cape.    

Experience factor   

Hill said Ford has intensified the drive towards a consumer-centric approach, which involves close study of the entire value chain. Shorter service turnaround times and greater support from head office level on technical matters at dealership workshops were among the positive changes.    

“Customers don't differentiate between dealer and manufacturer; when they talk about the experience they just talk about Ford.   

“So it's absolutely critical that we've got that seamless integration between manufacturer and dealerships, that everybody is working to the same agenda, that we've got the same objectives, the same belief in  what we're trying to achieve.”   

He spoke about creating consistency from the start of purchase and maintenance to the repeat cycle of ownership.

“It is really about securing our footprint in Africa for the long term; we've been here for 98 years coming up on the anniversary, how do we set ourselves up for the next 100 years?”   

The Covid-19 question 

Hill believes Ford weathered the Covid-19 storm well, despite the initial impact in productivity brought by lockdown measures.

The company paused operations even before the official announcement from government, as employees' wellbeing was the priority.    

“Through the pandemic we took some brave decisions around what our business is going to be like, going forward, it accelerated some of the changes that would have taken a lot longer for us to get to; we were able to drive the business a lot faster through technology and the remote working environment.”

Employees who do not work on the factory floor have the ability to work remotely. He noted a number of advantages from this flexibility.    

“And then, you know, [Covid-19 impact] was worsened when the semiconductor global crisis came along.”   

While Hill said the brand was at unprecedented levels of inventory, the crisis prompted a close look at waste in the system, ways to trim fat from the organisation for leaner operation. In all, he believes the lessons learnt from the pandemic made the company a more agile one.    

As for the semiconductor shortage, Hill said the firm monitors the situation closely and expects that by the middle of 2023, matters would have stabilised.    

Product gaps 

We asked Hill when local consumers can look forward to Ford models sold in other markets.    

“When you look at our portfolio, losing Figo, losing Ecosport and the demise of Fiesta has given us holes in our portfolio, we're very aware of that.”   

Aggressive plans are afoot to remedy these product gaps, though some are a little further away than the company would like to divulge.    

“I think the reality is we've also been executing the Ford Motor Company strategy which we announced a couple of years ago, which said, we're not going to be exiting passenger vehicles per se, but we're going to be playing in the space of sport-utility vehicles, lifestyle vehicles, trucks and commercial vehicles, which is where our core strengths lie.”   

The brand's primary focus over the next 18 months, according to Hill, is launching Ranger and Everest.    

On the Volkswagen-Ford partnership, Hill dispelled ideas of badge-engineered passenger vehicles in the pipeline. We will not, for example, see a Volkswagen Polo Vivo with a blue oval on the front.    

“The agreement we have with VW is very specific, negotiated at a corporate level, involving collaboration on vans, so if you think Transit, Crafter, those types of vehicles, Amarok and Ranger, the agreement doesn't stretch beyond any of those other elements.

“We're looking at future products, where we can leverage levels of efficiency between the two companies, but certainly not in that particular space where we're going to see current products badge-engineered, if I can call it that.”   

Electrification plans 

Hill confirmed that Ford has plans to play in the local electrification space in the not too distant future, adding that Mach-E was not off the table.   

“I think the biggest challenge we, together with the rest of the industry, are facing is the uncertainty in terms of policy.   

“The government issued a green paper in March last year; it was with the promise of a white paper coming out in September and we're sitting in August 2022.   

“It's not so much about the demand side of the business, but about the production side, that's the space we're all looking at. We need to have certainty to secure export markets and to create economies of scale in the investment.   

“We are certainly looking at a multitude of different vehicles we can bring in, on electrified platforms, both current and future.”

Purchasing trends 

According to Hill, affordability pressure will increase, with inflation at record levels and the looming prospect of further interest rate hikes.

“The danger that we see with customers is getting into a trap, where people are financing vehicles on 72 months finance terms with a 35% balloon payment. I've seen people going as much as 96 months. Financing a vehicle over that length of time and then having a balloon payment on that vehicle becomes a never ending spiral.   

“The real interesting approach I think is going to continue to take more traction in the market is going to be something along the lines of private leasing, or what we term as Ford Options.   

“We've been working on this progressively, where you're financing the portion of the vehicle you're actually using, and it's worked very nicely now, especially with the demand we see on used vehicles, with a shortage of new cars, residual values on vehicles have actually been increasing.   

“So what we're seeing is people are actually getting higher values for the used vehicles, which is allowing them to trade into a new vehicle on a shorter cycle, but only paying for the portion of the vehicle they actually use, which can be over two, three or four years.”   

Another observation relayed by Hill related to an increasing shift to online purchasing, an area which Ford plans to ramp-up its offerings to customers.

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