Ford expands in China

24 April 2012

BEIJING: Ford, the automaker, is planning to greatly increase the size of its Chinese portfolio to generate future growth, with SUVs and low-cost cars among the firm's priorities.

The company intends to roll out 15 new vehicles in the world's most populous nation by 2015, to build on an existing line-up including models like the Fiesta, Focus and Mondeo.

"It's all part of our plan to bring all the product portfolio that Ford has globally to the Chinese market," John Hinrichs, Ford's president, Asia Pacific and Africa, told CNBC.

A core category will be SUVs, one of the fastest-growing segments in China, with 2m units sold last year. "It's a Ford strength globally," said Hinrichs.

To penetrate third, fourth and fifth tier cities, Ford may also introduce cars costing less than the Fiesta, on sale for between $12,300 and $17,500. "We believe the Ford brand has the capability to go a price point lower than Fiesta," Hinrichs said.

More broadly, Ford is in the midst of a $5bn local investment programme, with a key current project taking the form of a $760m plant in Hangzhou, supplementing those in Nanjing and Chongqing.

At present, Ford lags behind Volkswagen and GM in China. While it has not set explicit goals regarding its market share, Hinrichs stated the aim is certainly for "more than we have today".

"The last two years, Ford's growth outpaced the auto industry here in China without any new products or new capacity," he said. "We'll expect obviously to grow our business as we bring in more products in the next few years."

Chery, Geely and Great Wall are some of the indigenous carmakers, or original equipment manufacturers (OEMs), aiming to boost their position, and Hinrichs argued these marques cannot be ignored.

"I think all the Chinese OEMs are big players today. Their products are getting better, their ambitions are getting larger. But we compete on a global scale with all the major manufacturers, so we welcome all of our competition," he said.

The Chinese government has also established the objective of ensuring 5m low emission vehicles are on the road by 2015, although thus far take-up of these offerings has been mixed.

"Our power trains are capable, in our line up to be able to be made whichever way the consumer goes," said Hinrichs. "Here in China there aren't many sales yet of any EVs, so we're watching that very carefully. We're ready to go with the process and the product when the customer is ready."

Data sourced from CNBC, Reuters, Bloomberg; additional content by Warc staff