Ford Plans China Expansion
Ford Motors plans to spend more than US$1.5 billion to
expand production and boost market share presence in China.
On a visit to China, William Clay Ford, the company's
CEO, said that the company would boost production of its
Mondeo and Fiesta cars at its Chongqing facility, and
would also add an engine-making plant in the country.
The present facility is designed to make 50,000 cars a
year; Ford plans to boost it to 150,000 cars annually.
Ford has faced pressure in all markets lately, and it
has been late to get in on the growing Chinese market.
Its production is one-half of GM's China production. In
addition, its models are not considered to be up to date,
unlike GM, which has a reputation for bringing in newer
models. In China, its joint venture partner is Chongqing
Changan
Automobile which is China's largest maker of minivans.
Unfortunately for Ford, they have so far been unable to
cash in on the overseas popularity of its light trucks
in China.
For Ford, although Chinese auto sales are growing by
a large percentage every month, it will be rough going
because all the major Japanese and American makers already
have an established manufacturing and sales presence.
At a time when experts are questioning whether there should
be three major American automakers, it is tough playing
the last position.
While China welcomes foreign investment in auto production,
and there is strong auto demand from consumers, auto sales,
advertising and marketing costs are also going up. Chinese
buyers also have a reputation for being very choosy, and
when possible, go for luxury brands. It is not unusual
for wealthy city buyers to buy a Mercedes or BMW as their
first car.
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