Ford's Major Expansion in China

[mackinaw]

From today's Detroit News, 50 new models by 2025.

 

"Ford Motor Co. will pump 50 new vehicles into China over the next eight years as the company tries to grow its share in the world’s largest market. Executive Chairman Bill Ford and CEO Jim Hackett announced their plans in China on Tuesday. They include introducing eight new SUVs, and at least 15 electrified Ford and Lincoln vehicles, some of which will be built and sold exclusively in China.

 

By 2025, the company plans to offer more than 50 new Ford and Lincoln vehicles in China, emphasizing SUVs and the electric vehicles pushed by the Chinese government. That number includes both brand-new product launches and next-generation models of vehicles the company already sells in China. Ford will also assemble five more vehicles in China for the Chinese market starting in 2019. Those vehicles include a previously announced Lincoln SUV, and Ford’s first all-electric small SUV"

 

http://www.detroitnews.com/story/business/autos/ford/2017/12/05/ford-electric-china/108326432/.

[rmc523]

Same info, different article:

 

https://www.autoblog.com/2017/12/05/50-new-vehicles-by-2025-ford-china/

 

 

They mention it includes Ford and Lincoln vehicles, but I'm assuming it includes the JV brands and perhaps Lincoln as well.

 

Producing "a previously announced Lincoln SUV"......that'd mean either MKC or Nautilus, but I think MKC, which would be more price sensitive - if they can produce it there, they can either lower the base price to increase sales, or maintain the base price and have a higher profit. The 2019 timeline also fits in with the next-gen model.

[bzcat]

Seems like the 50 new models is inclusive of all the brands: Ford, Lincoln, JMC, Yusheng, and whatever brand the new JV with Zotye will be called.

 

Also, I forgot to post this article from last month... talks about how One Ford is basically dead because it was holding Ford back from investing regional specific vehicles. While the article was specifically about China, you can also take the same conclusion about India, Southeast Asia, and South America where Ford is lagging badly, and where the successful competitors have all taken on a hyper-local strategy.

 

https://www.reuters.com/article/us-fordmotor-china-strategy-exclusive/exclusive-one-ford-two-systems-u-s-carmaker-revamps-china-strategy-amid-ev-push-idUSKCN1C81EB

Edited December 5, 2017 by bzcat

[jpd80]

I remember years ago talking to an insider and back then, Ford realized that the "one Ford"formula

would only get them so far and today, there's more general acceptance that people in different regions

want different things. It's only through systematic culling of all those redundant platforms that the company

can now be grown in other areas and directions.

 

Gotta love how Ford blows hot and cold depending on what the image makers and accountants want...

In survival mode, Ford needed to do the maximum with the minimum, now it's all about diversity to

prevent falling behind in a sea of new products..

Edited December 6, 2017 by jpd80

[akirby]

To me the biggest impact of One Ford was to simply stop NA and Europe from duplicating platforms and vehicles. Ranger, Focus, Escape, Fusion. There was never a need for 8 unique vehicles on 8 different platforms. Now they have 4 vehicles on 4 platforms with regional tweaks.

 

They never intended for every car they built to be sold everywhere. Just don't duplicate things unnecessarily.

[rmc523]

https://www.autoblog.com/2017/12/06/ford-china-alibaba-tmall-sell-cars-online/

 

 

 

Ford is expected to sign as early as Thursday a deal with Alibaba Group Holding which may allow the U.S. automaker to test selling cars to consumers in China through Alibaba's online retail arm Tmall, as well as via a new "auto vending machine" store concept, according to a Ford source familiar with the matter.

Ford Executive Chairman Bill Ford Jr. and Ford CEO Jim Hackett are expected to be in Hangzhou on Thursday to sign a letter of intent outlining the partnership.

According to the source, who did not want to be named because he is not authorized to speak with reporters, the deal is intended to position the Dearborn, Michigan, automaker for an emerging Chinese marketplace where more cars could be sold online.

The partnership would be part of Ford's effort to overhaul its China strategy to revive the growth momentum it has lost in recent months.

Ford's global chief spokesman Mark Truby said the company is expected to make an announcement on Thursday in Hangzhou, where Alibaba is based, but declined to comment in advance.

Alibaba spokeswoman Crystal Liu declined to comment.

The source said the proposal could mean that cars purchased online are delivered to buyers by franchised Ford retail stores and would be maintained and repaired by them.

But Ford could also use Tmall's new retail concept called the "Automotive Vending Machine" — a multi-storey parking garage that partly resembles a giant vending machine — to sell directly to consumers, the source said. Those cars could come directly from Ford or from its dealers, but the details are still to be worked out, the source added.

[bzcat]

To me the biggest impact of One Ford was to simply stop NA and Europe from duplicating platforms and vehicles. Ranger, Focus, Escape, Fusion. There was never a need for 8 unique vehicles on 8 different platforms. Now they have 4 vehicles on 4 platforms with regional tweaks.

 

They never intended for every car they built to be sold everywhere. Just don't duplicate things unnecessarily.

 

You are right that it was mainly about consolidating engineering to avoid duplication of costs and efforts but it also mean that all products had to be basically tied to global platforms. Local products had to go to Detroit for review.

 

The current emphasis seems to be that premium products are still tied to global platforms but local regions (China specifically but I imagine other regions too) will now be free to do low cost cars without going to Detroit to get approval. We should start seeing a lot of low end cheap vehicles that don't necessary have anything to do with global platforms in China and probably South America. It's basically the same strategy that GM, FCA, Renault, Toyota, Honda, and Hyundai are all using.

Edited December 6, 2017 by bzcat

[jpd80]

 

You are right that it was mainly about consolidating engineering to avoid duplication of costs and efforts but it also mean that all products had to be basically tied to global platforms. Local products had to go to Detroit for review.

Yhat was always the case.

The process was to first choose variations of existing vehicles and if these could not be made suitable for intended market

only then could a regional specific vehicle be chosen to fill the gap. On top of that, the business case still had to pass

scrutiny.

 

 

The current emphasis seems to be that premium products are still tied to global platforms but local regions (China specifically but I imagine other regions too) will now be free to do low cost cars without going to Detroit to get approval. We should start seeing a lot of low end cheap vehicles that don't necessary have anything to do with global platforms in China and probably South America. It's basically the same strategy that GM, FCA, Renault, Toyota, Honda, and Hyundai are all using.

For the last ten years, Ford has repeated its belief that outside of trucks and full sized SUVs,

it sees no need to change away from FWD/AWD platforms, especially now that the pace of

change to electrification is increasing.

 

The regionalization of China's vehicle needs was always going to happen but don't think

for one moment that Deatborn will be hands off in the decision making process, Ford China

still has to present all buisiness cases for review and project financing, the process is now

being streamlined but the vetting process is still in place.

 

And while Ford likes to say 50 new vehicles, they like to double and triple count the same vehicles

by adding up all the various permitatons across both brands and models.

Edited December 6, 2017 by jpd80

[Pioneer]

http://redirect.viglink.com/?format=go&jsonp=vglnk_151260860773216&key=2aef7e66c16916ba67b6112493391dbb&libId=javs1dpr0100b4d8000DLcqm23z7q&loc=http%3A%2F%2Fwww.blueovalforums.com%2Fforums%2Findex.php%3F%2Ftopic%2F64005-ford-3rd-quarter-results-2017%2F&v=1&out=http%3A%2F%2Fshareholder.ford.com%2F~%2Fmedia%2FFiles%2FF%2FFord-IR-V2%2Fevents-and-presentations%2F2017%2F10-26-17-Q3%2F2017-3Q-Corp-Earnings-Slides.pdf&ref=http%3A%2F%2Fwww.blueovalforums.com%2Fforums%2Findex.php%3F%2Fforum%2F72-ford-motor-company-discussion-forum%2Fpage-3%3Fprune_day%3D100%26sort_by%3DZ-A%26sort_key%3Dlast_post%26topicfilter%3Dall&title=Ford%203rd%20Quarter%20Results%202017%20-%20Ford%20Motor%20Company%20Discussion%20Forum%20-%20Blue%20Oval%20Forums&txt=http%3A%2F%2Fshareholder.f...ings-Slides.pdf

 

 

Page 9. Just like with other sections of Ford's portfolio, seems like North American Trucks are paying for everything these days, Seems like a waste of money with the minimal returns.

[mackinaw]

So if you were CEO of Ford, you would deliberately skimp on products for China, which is the largest automotive market in the world? Really?

[akirby]

Not just the largest market, but the fastest growing market.

[jpd80]

For all Ford and Lincoln's gains there, it seems to produce little actual profit.

I think they're in China because everyone else is....the fear of missing out.

Edited December 7, 2017 by jpd80

[J-150]

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Edited December 7, 2017 by J-150

[Pioneer]

So if you were CEO of Ford, you would deliberately skimp on products for China, which is the largest automotive market in the world? Really?

So, you're going to invest the money and resources for 50 new vehicles into a country with 1/8th the profit margin as the US? All while your core market lags because the product is suffering?

 

Brilliant!

[Pioneer]

Not just the largest market, but the fastest growing market.

So, we'll use GM logic and make it up in volume?

[rmc523]

For all Ford and Lincoln's gains there, it seems to produce little actual profit.

I think they're in China because everyone else is....the fear of missing out.

In order to grow, they have to spend money to add dealers and facilities - that can't help profitability.

[akirby]

So, you're going to invest the money and resources for 50 new vehicles into a country with 1/8th the profit margin as the US? All while your core market lags because the product is suffering?

Brilliant!

According to you the only product here making money is trucks and they certainly aren’t lagging in product there.

[Pioneer]

According to you the only product here making money is trucks and they certainly arent lagging in product there.

Trucks and SUV's. We seem to only have one launch engineer assigned to North America though since the rollout is taking forever. If only we could free up resources from somewhere else.....

[jpd80]

In order to grow, they have to spend money to add dealers and facilities - that can't help profitability.

I'm sure how it works in China but perhaps, Ford sold each and every one of those dealer franchises for a profit

but provided dealers with building and floor plan financing?

 

Lincoln didn't add dealerships this year, dealerships added satellite offices to improve sales

Over 45,000 sales to November, they'll break 50K for the year.