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Ford to add 100 dealers in China to keep pace with demand


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Ford to add 100 dealers in China to keep pace with demand

U.S. autonmaker's sales up 39% in the first 10 months

Ford expects 70 percent of its growth in the next 10 years to come from the Asia-Pacific region and Africa.

November 25, 2010 06:01 CET

BEIJING (Reuters) -- Ford Motor Co. is pushing forward with expansion plans by adding 100 dealers to its Chinese network this year. The move will bring the number of its dealers in China to 340 by the end of the year, said Joe Hinrichs, president for Ford's Asia and Africa operations, up from the original target of 310.

Ford is largely targeting inland cities with the new outlets. These areas are replacing big coastal regions as the major growth driver in the world's largest auto market.

"We did a pretty thorough study and looked at where our opportunities were and decided we need to be more aggressive," Hinrichs told Reuters, adding that more dealers will open for business in 2011.

As China's national wealth grows, smaller cities in the north and west are becoming increasingly important for foreign automakers that already dominate big, coastal cities. Ford expects 70 percent of its growth in the next 10 years to come from the Asia-Pacific region and Africa, the company said.

Vehicle sales in Tier 3 and Tier 2 markets jumped 67.7 percent and 56.5 percent, respectively, in 2009, compared with a 42.6 percent increase in Tier 1 cities, according to Xu Changming, a senior industry researcher at the State Information Center.

Ford's Fiesta subcompact, priced between 78,000 yuan and 110,000 yuan ($11,700-$16,600), is selling extremely well in smaller cities where people tend to be more price-sensitive.

Other automakers eye inland China

Other global players are also making a push toward inland China. General Motors Co. rolled out the Baojun 630 sedan this week in southern China. The company, along with its partner, SAIC Motor Corp., also plans to increase its China dealerships by appointing more than 100 sales outlets by the first half of next year to distribute the Baojun cars. Nissan Motor Co.and its partner, Dongfeng Motor Group, also unveiled a joint venture brand for the Chinese market, Venucia.

Hinrichs said Ford can compete effectively in different market segments, adding the automaker would introduce a number of new products in China in the coming years.

Jiangling Motors Corp., which makes both JMC light commercial vehicles and Ford's Transit van, also complements Ford's China portfolio, he added.

"We are watching very closely in the Chinese industry what's happening with the proliferation of brands," he said. "With more and more new brands being introduced all the time. We want to focus our attention and energy on the Ford brand."

China market

Ford, the only U.S. automaker to have steered clear of a U.S. government bailout and bankruptcy in 2009, is a relatively late-comer in China, where GM and Volkswagen AG have built up a lead.

But Ford has been accelerating its expansion, building a greenfield car and engine plant with partners Changan Ford Mazda Automobile Co. in the southwestern Chinese city of Chongqing, and also plans to set up a new engine plant there. Jianling Motor, which is 30 percent owned by Ford, is also expanding through a new $300 million facility.

In the first 10 months, Ford and its partners sold 468,754 vehicles in China, up 39 percent from a year earlier, outperforming a 34.8 percent gain of the overall China market. By comparison, Toyota sold 643,599 units in the same period, up 17 percent on the year.

China has been a bright spot amid a global industry still recovering from a steep downturn. But many industry insiders expect the market to return to a slower but more typical pattern next year after breakneck growth in 2009 and the first quarter of this year.

Hinrichs shared the view but was reluctant to speculate on market outlook for 2011.

"The fourth quarter of this year, right now, looks very strong. So we're going have to watch it quarter by quarter and see how it goes because most predictions so far about the auto industry in China have been wrong."

Read more: http://www.autonews.com/apps/pbcs.dll/article?AID=/20101125/ANE/311259998/1131#ixzz16L8xCxjU

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Ford adding 100 Chinese dealers

Carmaker seeks buyers in provincial cities

By ELAINE KURTENBACH

SHANGHAI, China -- Ford is adding 100 new dealerships in China this year, raising its total number of outlets to 340, as it courts new car buyers in provincial cities.

Like other major automakers, Ford is looking to emerging markets for growth lost in the U.S. and other traditional strongholds. It expects 70% of growth in its sales to come from the Asian-Pacific and African regions over the next decade.

The automaker inaugurated 40 dealerships Thursday out of 66 it plans to open before the end of the year. In 2010, it plans to have opened 100 dealerships.

China's car market is the world's biggest and sales are growing fastest in the provincial cities as the benefits of the country's economic boom spread from its east coast to the interior where millions of new and potential car buyers live.

"When you think about China, it's the central, western and northern areas that will see the most aggressive growth," Joe Hinrichs, president of Ford, Asia Pacific and Africa, and chairman and CEO of Ford China, said in a phone interview.

Ford is forecasting record sales in China this year, though it got a later start and has a smaller presence in the country than rival General Motors.

The company earlier reported its China sales in January-October surged 39% to 468,754 vehicles.

"It's been an interesting year, with a very strong first quarter and fourth quarter, though sales slowed down a bit in the summer. It's a bit of a 'U' shape," Hinrichs said.

Tax cuts and subsidies for energy-efficient vehicles helped spur sales of minivans and small cars last year, making China the global leader in sales of new vehicles.

This year, demand for bigger vehicles and imported models has rebounded as car owners upgraded.

Passenger car sales rose 36% over a year earlier during the first 10 months of the year, to 11.1 million vehicles, according to the China Passenger Car Association.

Growth in industry-wide sales in 2011 is forecast at what experts say is a more sustainable 10-15%.

Ford marked Thursday's new openings with a celebration in Nanning, a city in southern China well beyond the traditional big markets in Beijing, Shanghai and other eastern coastal cities.

Read more: Ford adding 100 Chinese dealers | freep.com | Detroit Free Press http://www.freep.com/article/20101127/BUSINESS0102/11270356/Ford-adding-100-Chinese-dealers#ixzz16gPaBQ8E

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