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Asia To Provide Car Industry With Two Billion New Customers

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Ford Nanjing Plant (Ford Photo)

Ford Nanjing Plant (Ford Photo)

jeffgilbert Jeff Gilbert
Automotive reporter for WWJ Newsradio 950 and CBS Radio News....
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DEARBORN (WWJ) – Ford is gearing up for a lot of growth in Asia.

“When you’re in to these emerging markets you have to take a long-term view,” says David Schoch, President of Ford Asia-Pacific, a division that includes China, India and many other emerging markets.

Speaking to reporters at Ford World Headquarters, Schoch said Ford’s already seen its market share in China nearly double in two years, as the company embarks on a project to build more plants, and get more products into more Chinese dealerships.

Ford started this decade with 14 assembly and powertrain plants in the Asia-Pacific region. By 2015, they will have 23 factories.

That should add significantly to the company’s bottom line.

“In the first half of this year, we had a profit of 183 million, which is up sharply from our losses last year,” said Shoch. “By mid decade, I do expect Asia Pacific to be a major contributor to Ford’s profits.”

Part of that is a growth rate that, Shoch says, will see two billion new potential buyers come into the car market by 2020.

“These are young people, that are coming of age and are starting to get the ability to buy, in other words starting to have the disposable, personal income to buy a vehicle.”

The global car market is growing, with much of the growth occurring in Asia-Pacific. That region accounts for 41 percent of sales today. It will rise to 46 percent in 2020.

A large Focus of that growth is China, which is now the world’s largest car market, where customers will buy 21 million cars this year. By 2020, Schoch says sales should grow to 32 million, making China a larger market than North America and Europe combined.

“In China today, about 75 percent of our buyers are first time buyers.”

Shoch says much of the growth in China will come in small SUV’s and luxury vehicles. Ford will be launching the Lincoln brand in China in the next few years.

Ford is also looking at creating a subcompact aimed strictly at emerging markets, something aimed at people who can’t yet afford a small Fiesta. It’s also been exploring a China only brand.

As the growth continue, Schoch says Ford could look to add even more capacity in China.

Ford still trails companies like General Motors and Volkswagen that got into the China market early. But, Schoch says they are quickly catching up.

“I feel very confident right now about the progress we’re making.”

Connect with Jeff Gilbert
Email: jdgilbert@cbs.com
Facebook: facebook.com/carchronicles
Twitter: @jefferygilbert

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