10-09-2013, 02:09 PM
Join Date: Mar 2009
Location: Sacramento California
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Ford Drives for 5% Share in China This Year
Ford Motor Co. likely will account for 5% of new car sales in China by the end of this year, doubling its market share in the world's largest auto market since the beginning of 2012, a top executive said.
Ford, which is adding 10 assembly and powertrain plants in Asia between 2011 and 2015, is considering additional plants to meet growth in the region, David Schoch, group vice president of Asia-Pacific, said on Wednesday.
"We are exploring whether we need to expand further"
Ford began selling a trio of new sport-utility vehicles this year, the Explorer, EcoSport and Kuga, that have helped to push up Ford's Ssales 51% trhough September this year. After racking up losses in Asia-Pacific because of heavy investments in new plants, the company has turned the corner and now is forecasting a profit in Asia for the year.
Ford's Asia strategy, which included a nearly $5 Billion investment in plants in CHina, appears to be paying off and Mr. Schoch, said the region "will contribute significantly to Ford's global profits by mid-decade." That means that as soon as 2015, the region could become an engine for Ford, which has relied almost entirely on North America for profits for the past several years.
Ford is adding 10 plants in Asia, mostly in China with two in India, anticipating that global vehicle demand will reach 109 million units a year, up from 82 million in 2012. Most of the growth is forecast to come in China and India over that period.
Ford posted a pre-tax profit of $183 million in Asia in the first half of 2013, up from a loss of $161 million a year ago. With volumes rising throughout the year and high-margin sport-utilities only going on sale in the second half of the year, profits could be higher in the back half.
Ford got a late start in China, entering the market inthe late 1990s and not investing heavily in new products there until the past five years. It had few products to sell and not enough dealerships.
Under Chief Executive Officer Alan Mulally, Asia has become a major priority for Ford. The region has been flooded with new products, nearly all of them built using Ford's new global architectures that share parts and designs with one another. Mr. Schoch said Asia's operations, because so many are new, are the best embodiment of the end goal of Ford's strategic product plans, which envision building 80% of its vehicles on just six different platforms, which are the engineering underpinnings of vehicles.