Ford's China Syndrome: Too Little, Too Late
Ford is finally waking up from sleeping through the fact that China became the world’s largest car market 2 years ago, and that China will most likely grow explosively for the next 20 years. Ford will introduce 15 new vehicles in China by 2015, the company told Automotive News [sub]. Ford will also more than double the number of its 340 dealerships in China by 2015. Ford furthermore is looking at doubling the work 1,200 strong workforce at its joint venture with China’s Chang’an.
If that is the case, then maybe I have looked in the wrong places. As our latest, J.D. Power-supplied sales rankings of Chinese brands show, Ford finds itself on place 14, behind such powerhouses as Chery ( BYD ( Great Wall ( and Suzuki ( In the first two months of 2011, Ford sold 51,170 cars in China. In the same period, the Volkswagen brand sold 276,137, Hyundai sold 129,430, and Toyota sold 124,286. Ford is looking at a minuscule share of 2.4 percent of the Chinese market, compared to 12.8 percent of the Volkswagen brand alone. One of Ford’s biggest seller in China is the Ford Transit.
Ford is a late-comer in China. It started in 2003, building some 20,000 Fiestas from kits. In 2006, Mazda joined the fray for a threesome. Like most threesomes, it didn’t work out. After Ford and Mazda disengaged in Japan, Ford and Mazda parted ways in China and started their own joint ventures – both with Changan. The separation is not finished yet and won’t be finished until the Chongqing plant will be operational in 2012. All this does not help.
Also, compared to the aggressive expansion plans of China industry majors, which intend to more than double their joint capacity by 2015, Ford’s expansion plans in China sound like too little, too late.
Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.
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This is a blessing in disguise for Ford. If they sold millions in China, they'd have to recall millions also. Them being the king of recalls, king of rollovers, and king of spontaneous combustion and all.
Sometimes being first to market isn't always a good thing, look at Apple. They wait and then come in with a vengeance. GM and VW have a big lead now, but Ford is capable of coming on strong. They should study the others and learn from their mistakes. The market isn't going to collapse there and everyone will start riding bicycles again.