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The new Ford Territory is designed to adapt to the changing needs of Australian motorists, offering car-like styling and vehicle dynamics with the versatility of a four-wheel-drive or people mover.

The Territory will go on sale in the second quarter of next year.

Ford Australia President Geoff Polites said Territory continues a tradition of innovation and ingenuity for the Blue Oval in Australia.

"Today is a huge milestone in the 77-year history of Ford in this country. Territory will redefine the local automotive market," Mr Polites said.

"It represents an exciting new phase of our development as a vehicle designer and manufacturer. And it continues a tradition that began for us with the launch of the world's first coupe utility in 1934 and the introduction of the long wheelbase concept in 1967," he said.

The Ford Territory will be built on the same assembly line as Falcon and was conceived and designed from scratch in Ford's Broadmeadows design studio.

It shares a number of components with the award-winning Falcon, but has a completely different underbody structure, unique front suspension and an all-wheel-drive system that incorporates global technology.

Territory will share some Falcon engines and transmissions and will have an adaptation of the Falcon's award-winning Control Blade IRS.

Mr Polites said Territory would carve out its own niche in the local market.

"We've done more than three years of extensive market research into this vehicle and established a growing need for a vehicle that combines the best characteristics of family sedans, all-terrain wagons and people-movers.

"We talked to large car owners, owners of large 4WDs and owners of people movers and we found that although each of these owners was reasonably happy with their current vehicles, they could all identify areas where their vehicle didn't match their needs and wants.

"Large car buyers liked their car's performance and handling, but wished it could do more in terms of adapting to their lifestyle.

"4WD owners loved the command driving position and the versatility but wished it handled like a car. They also admitted that they didn't need the full-scale off-road ability and weren't happy with the upfront and operating costs.

"And some told us that while they enjoyed the freedom and ruggedness of their 4WD, they didn't enjoy driving it to work in traffic every day.

"People mover drivers grudgingly admitted that their car was very practical, but they hated being the bus driver.

"So there was basically an unmet need out there for something that offered the handling and style of a car with the versatility of a 4WD or people mover," he said.

Apart from consumer demand, the business case for the new Ford Territory was also sound.

"Territory allows us to make better use of our plant capacity and will also attract new people to the Blue Oval brand - specifically younger buyers and women," he said.

"And importantly for Australia, we estimate that 60 per cent of Territory sales will substitute for current imports. So even without an export program, this vehicle will produce trade and balance of payments benefits for Australia," Mr Polites said.

Territory will be equally at home in either urban or outdoor environments.

Its flexible interior will offer functionality and practicality without sacrificing style and aesthetics.

"We see the main target market for this vehicle as the established family. Buyers in this market want a vehicle that is practical and versatile, with an interior package that accommodates an active lifestyle. But they also want something stylish and fun to drive," Mr Polites said.

There will also be demand from young professional couples, as well as older couples without children and empty nesters.

"All three markets are looking for style and quality, as well as the confidence of all-wheel-drive and a command driving position," he said.

In terms of price, the vehicle will provide a logical alternative to traditional cars and 4WDs, offering the right combination of features at an attainable price.

Ford will release interior details closer to the official launch of the vehicle.