The above alternatives were eliminated in favour of a substantial redesign of the indigenous platform, due to concerns about the Australian market preference for high towing capacity, large interior size and local employment.

It also featured Australian production firsts, such as Variable Cam Timing (VCT) on some 6-cylinder models and an adaptive automatic transmission on the high-performance T series with steering wheel gear shifting buttons.

As stated previously, the AU was the first Falcon to offer IRS (a double wishbone design on an isolated subframe).

The engine range comprised: the base Intech model producing 157 kW (211 hp), with a revised cylinder head featuring smaller valve stems, larger exhaust valves, and different rocker ratio, as well as a revised piston and longer conrod and a cast aluminium cross-bolted oil sump (with the same power output as the EL series); an "HP" version reserved to the XR6 producing 164 kW (220 hp) (thanks to: unique cylinder head; reshaped inlet port; redesigned exhaust port; ‘open’ combustion chamber shape to restrict pre-detonation from hot spot areas; unique camshaft; higher fuel pressure; recalibrated EEC V engine management system); the VCT version producing 172 kW (231 hp) for the XR6 VCT; a "Windsor" V8 producing 185 kW (248 hp) (also carried over from the EL series but without major upgrades).

When new, the car was competitively priced at A$30,690 with automatic transmission and air conditioning (at the time an option on the other Australian-made rivals) fitted as standard.

The more 'up-spec' model was called the Falcon Futura, which was marketed as a family-oriented safety package in the same vogue as the rival Holden Commodore Acclaim.

The Futura differed from the Forté in having a body coloured grille, standard ABS, cruise control, alloy wheels and a digital clock fitted in the centre console (series I only).

It achieved this through additional features such as body-coloured grille, alloy wheels, S decals on the rear quarters and bootlid, and a high level spoiler.

The colour choices were limited to Venom (Red), Liquid Silver, White, Galaxy (Metallic Blue) and Silhouette (Black).

It originally comprised the XR6 HP, XR6 VCT, and XR8 models all sharing a unique quad-lamp front bumper bar and non-high end bonnet.

It had all of the fittings of the Futura but included extras such as a honeycomb grille, an 80-second headlamp off delay, wood grain-look dash inserts, unique 15" wheels, dual horns, Fairmont badging on the boot lid and an analogue clock.

It had additional features that included unique 16" wheels, toggleable traction control, 4-channel ABS, 250 watt audio system with separate amplifier, 11 speakers, and more wood grain-look dash inserts.

Despite competitive pricing and high standard equipment relative to its rivals, especially for the new entry-level Forté, sales of the AU did not match those of the previous model, the EL Falcon.

This was partly due to a lack of enthusiasm by customers for the "New Edge" styling, alteration of fleet sale pricing as well as the long-term decline in the market for large cars.

In May 1999, the AU range received a minor update, introducing a bigger brake booster, front power windows for the Forté and XR6 and lowering the rear suspension of non-XR variants by 24 mm.

[9] The only limited edition launched with this initial series, was the Falcon Classic of June 1999 marketed till October 1999[9] to boost sales.

It inherited an eggcrate grille from the non-XR Utility range, dual airbags, ABS brakes, cruise control, upgraded sound system, a "warm charcoal" interior, power aerial, special trim, 15-inch alloys, low profile rear spoiler, bumper inserts and paint.

They included: Body strength increases, aimed at improving occupant safety and the Falcon's rating in the independent ANCAP crash test program, were also achieved.

[9] Additional features included the introduction of a 100 watt stereo with single-slot CD player, variable intermittent wipers and door lock/unlock button on the instrument panel and the equipment upgrade (such as standard air conditioning, front power windows and automatic transmission) on the entry Forté model, to shrug off initial impressions the low budget perception associated with the first AU series.

[9] Sedan-based limited editions included the: X-Pack (a Forté upgrade with a choice of two ROH alloy wheel designs from the Ford accessory line as standard and original XR rear wing), SR (Forté-based S successor now with ABS), Futura Classic, Futura & Fairmont Ghia 75th Anniversary sedans (to commemorate Ford Australia's birth in 1925), XR8 Rebel (featuring a limited edition Ford Racing bodykit, 18-inch wheels, MOMO steering wheel and gear shift and a Sony PlayStation 2 with Grand Turismo III).

[9] Augmenting the X-Pack, in late 2000 Stillwell Ford dealers in South Australia launched a Sportryder variant, which added an upgraded and lowered sport suspension using Pedders components plus locally sourced CSA alloy wheels for A$29,990.

[19] The FTE T2 range comprised: This final AU-based Falcon was presented at the Sydney Motorshow in November 2001, by surprise[20] The Falcon's Series III range reflected that of the AU II, except for: FTE additionally introduced more powerful T3 models as follows: Externally, the Series III, featured body-coloured mirrors and side strips plus standard side skirts and different wheels on some models.

Headlights became a shade darker, side indicators clear and a dot matrix windscreen was added to reduce sun glare.

In 2000, the Hillier brothers created a two-door AU Falcon Coupe based on an forte’ spec ex-police car.

Orders were then taken for up to 20 cars instead of the original 100, and Ford then left the project, killing off the Hillier Coupe from small scale production.

The lack of success by Ford during the late 1990s and early 2000s prompted V8 Supercars to introduce a new platform known as "Project Blueprint" that would make the competition more evenly matched.

Privateer racer Trevor Haines raced a TE50 to 13th place in the 2002 Australian GT Production Car Championship, and later the team finished 9th outright and a Class 5 win in the 2002 Bathurst 24 Hour.