Ford Says Strong China Sales Are Just The Start
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DEARBORN — (WWJ) The April performance of an all new Focus is giving a glimpse at Ford’s future in China.
Ford sold 9400 Focus models in China last month, pushing its overall sales up 24 percent. Joe Hinrich, president of Ford Asia Pacific and Africa, says Focus sized vehicles are where the growth is.
“The growth expected the rest of this decade in China is largely to come from the central and western parts of the country, which is more value oriented products.”
INTERVIEW: Ford’s Joe Hinrich talks with reporters.
Hinrichs—in a wide ranging, hour long roundtable with reporters—said that of roughly 18 million annual vehicles sales in China, about 5 million vehicles come from what the industry calls the “C-segment,” cars that are roughly the size of the Focus.
That, he says, gives Ford the opportunity to put out several vehicles of roughly the same size, with different styling, different names and different amenities. Hinrichs says that strategy has worked for other carmakers, most notably Volkswagen.
At the recent Beijing Auto Show, Ford announced that it would bring a high performance Focus ST to China, along with three new SUV’s, the small EcoSport, mid-size Kuga and Explorer. Hinrichs gave no specifics on other products, only saying that Ford plans 15 new or updated vehicles in China by 2015.
That’s expected to expand Ford from being a carmaker with a limited portfolio, into one with a full lineup of vehicles.
“It’s a huge market, it’s bigger than the United States,” said Hinrichs. “There are many different customer segments and many different product desires.”
No word yet whether Ford will bring the Lincoln brand to China, and it’s too early to tell, Hinrichs says, whether Ford will establish a low end brand strictly for the China market.
He said Ford is working on establishing a strong dealership network in China. With 400 dealers in a market larger than the U.S., there’s a lot of opportunity for expansion, says Hinrichs. The U.S. has about three thousand Ford dealers.
As Ford expands in China, it’s also looking for growth in other parts of Hinrich’s territory, which includes Thailand, India, and other growth markets.
“We’re building nine plants, launching 50 new vehicles and power trains, ramping up as aggressively as we ever have,” he said.
Supply line disruptions are among the biggest issues that Hinrichs deals with every day. He says they are still recovering from last year’s earthquake and floods, which have delayed the launch of the new Ford Transit pickup in some markets.
A weekend explosion at a chemical plant in Thailand killed 12 people. But, Hinrichs says it’s not likely disrupt auto production.
Ford is also adding three thousand salaried workers in the Asia-Pacific region. That comes in an area with an attrition rate of around 11 per cent. That compares to a rate of less than one per cent in North America.
Hinrichs says many workers, particularly in China, expect fast advancement, and when they don’t get it, they leave for other jobs.
“They go home every Chinese New Year, and tell their family how they are doing,” he said. “The family wants to see a different title on that business card. There’s only one child, and there’s a bunch of people looking at that child.”
Hinrichs, who’s been speculated as a possible successor for CEO Alan Mulaly, refused to speculate on his future, or how long he would remain in Asia.
He described the job as a challenge, but one that has a lot of rewards.
“When do you in your lifetime get an opportunity like this to be a part of this kind of expansion, the largest industrial expansion we’ve had. You’ve got to go back to the early sixties and the late fifties-post World War II–the last time Ford expanded like this.”
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