Ford to bring 50 new vehicles to China by 2025
Ford Motor Co. wants to grow its share in the expansive Chinese auto market. To do that, experts say the company has to build more vehicles there that cater to Chinese drivers.
That includes electric vehicles.
Executive Chairman Bill Ford and CEO Jim Hackett on Tuesday announced plans to bring 50 new vehicles to China over the next eight years. Fifteen of those will be either battery-electrics or plug-in hybrids. The company also said it will assemble five more vehicles in China for that market by 2019.
Ford is lagging nearly every global automaker in the world’s largest car market. Tuesday’s announcement outlines a nearly decade-long plan to establish relevance where people are buying the most vehicles, but Ford was late to the market.
Ford and Lincoln sold 938,570 vehicles in China through October of this year. By comparison, General Motors Co., sold 418,225 vehicles there in November alone. Along with its joint ventures, GM has sold more than 3.5 million vehicles in China with a month left in the year.
The plan marks the first sweeping list of goals outlined under Ford’s new CEO. Hackett in October told investors that he and his team plan to trim billions in operating costs and divert money from the development of passenger cars and internal combustion engines. Ford will invest those savings in trucks, SUVs and electric vehicles, but the company offered few specifics. Analysts say Tuesday’s plans show the importance of the Chinese market.
“The market is still extremely hot there,” said Dave Sullivan, manager of product analysis for AutoPacific. “The market there is twice as big as it is here. The luxury market is very big. Lincoln has a lot more potential than the Ford brand right now, but a lot of that success is going to come from being able to build in China.”
Ford has most recently found success in China with its Lincoln brand. The company said Tuesday that Lincoln will introduce more than a dozen electric vehicles and eight new SUVs there, and there’s reason to believe Ford might follow Lincoln’s path.
The Lincoln Continental released a year ago was designed for China with a plush, spacious back seat and airy cabin. The big sedan has helped bring customers to the Ford luxury brand there, where Lincoln is far more separated from the Blue Oval than it is in the U.S.
“The product has been designed with the Chinese customer in mind,” Amy Marentic, president of Lincoln China, told the Detroit News in a recent interview. “It just happens to work really well in the U.S. as well. We knew coming into the market as one of the last luxury brands to enter that we had to do something a little different.
“We’re still finding our way, but I do expect we will continue to grow.”
Lincoln sales have shot up 85 percent in China through October of this year.
Marentic believes the Chinese market will continue to lean toward electrics, driven largely by government mandates.
Her view is amplified by recent decisions at Ford. Less than a month ago, the company announced a $756 million Chinese joint venture with Chinese electric-vehicle giant Anhui Zotye Automobile Co. That partnership will launch a line of all-electric vehicles, the company says. Ford has a test center in China, and launched its Quick Lane service department there. As in the U.S., Ford plans for 100 percent of new vehicles sold in China be connected through embedded modems or plug-in devices by 2019.
The company also plans to manufacture its next-generation Focus in China and export them to the U.S. as a cost-saving measure. Another goal for Ford in China: improve revenue by 50 percent by 2025. The company made a $289 million profit there in the third quarter 2017 on a revenue of $3.7 billion.
The company will need to make a series of quick, strategic moves going forward to truly compete, according to analysts. That could include decisions to manufacture even more vehicles in China as import tariffs there begin to take a bigger toll. And it could mean more vehicles specifically designed for that market.
“Ford’s still a ways off,” said Sullivan. “They’re slow to react compared to their competition in China. Everyone understands how important it is to manufacture there, though.”