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Author: TMFBreakerRob Big gold star, 5000 posts Old School Fool Home Fool Supernova Phoenix 1
Mission Team Member CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 18134  
Subject: China! Date: 1/30/2013 4:29 PM
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I discussion of Ford's plans in China.... from the guy responsible for Ford's plans in China:

http://wardsauto.com/asia-pacific/new-product-portfolio-boos...

Rob
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Author: TMFBreakerRob Big gold star, 5000 posts Old School Fool Home Fool Supernova Phoenix 1
Mission Team Member CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 17379 of 18134
Subject: Re: China! Date: 1/30/2013 4:55 PM
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From the article:

David Schoch, who late last year took over management of Ford’s Asia-Pacific Africa division from Joe Hinrichs, says the auto maker is constructing five new plants in China – three for vehicle assembly and two dedicated to powertrains that will allow it to boost capacity.

Ford launched production of the Focus C-car at its Chongqing No.2 plant in early 2012, and Schoch says the model has been a runaway success. “That vehicle has done very well for us,” he tells WardsAuto in an interview here. “It’s been the leading sales nameplate in the past four months in China.”

Joining the Focus this year will be the EcoSport and Kuga cross/utility vehicles, as well as the performance-oriented Focus ST and new Explorer SUV. A refreshed Fiesta B-car and Mondeo midsize sedan arrive in 2014, to be assembled in Chongqing.

Schoch has high hopes for all the new products but is especially bullish on the soon-to-be-introduced utility vehicles.

“The fastest-growing (segments are utilities) and premium vehicles, and we’ve announced Lincoln is coming in by the middle of next year,” he says. In addition to the EcoSport and Kuga, “we’re bringing in the Edge and Explorer. So the full family of our strongest products we will have in China.”


Comments:

Kuga: It's the "world version" of the Escape, which is a C-platform vehicle (same as Focus). For most purposes, it's the same vehicle.... except additional powertrains, probably including a diesel.

EcoSport: This is a lot like the Kuga, except smaller. It's based off the Fiesta, a B-platform vehicle. That might seem "too small" to some, but I've driven one. They're pretty nice, although a bit spartan inside. Plenty of room for people, enough space for modest cargo needs, good vehicle dynamics, attractive..... and cheaper. :) To my knowledge, there are no plans to sell it in the US.... but plans can and do change frequently. LOL

Focus: Ford has a ridiculously low market share in China..... yet Focus is the top seller in China. That.... is ..... huge! A great risk for companies with low market share is to have a low "mind share". The fact that Focus is #1 shows that Ford has great mind share..... and that will be very important for building overall market share as these new factories and imported vehicles become available.

In the US, we're used to large vehicles. In the rest of the world, a C-platform vehicle like Focus is considered to be a large vehicle. Ford is bringing out an incredible flood of B and C platform vehicles over the rest of this decade.... and most of the action will be the smaller B platform stuff.

Recent workshops indicate Chinese consumers are aware of the Lincoln marque but view it as a presidential brand because of the name and the fact many past U.S. presidents have ridden in Lincoln limousines.

“We’re trying to change that image,” Schoch says, pointing to the Lincoln MKC concept that bowed at the recent North American International Auto Show here. “We really want to grab the younger, affluent Chinese, the late-30-year-olds that have made a lot of money.”


All that sounds pretty good to me.

And, while Lincoln is a marginal player in the luxury market.... the move into China is very, very smart IMO. Why? The Chinese should like Lincolns.... the vehicles may not be leading edge, but they have all the luxury cues.... which is one reason why GM has been so successful with Buick in China. Lincoln already has a positive image in China (although not quite what Ford wants. It's better than negative or zero.) Plus... and this is even more important.... the Chinese market should help Lincoln develop some scale and potentially make it easier to "justify" development of better Lincolns since there will be opportunity to make the investment pay off.

Anyway......

Bottom Line: Despite a very late entry into the Chinese market... and a slow initial expansion.... Ford looks like they're doing all the right things to build market share. They still aren't making money there.... but that should change as volumes ramp up.

Rob

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Author: marsuculix One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 17439 of 18134
Subject: Re: China! Date: 3/1/2013 8:46 AM
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hi Rob,
activities of Ford and other S carmakers in China are interesting indeed.

This week a broker called at my office and told me that there is a contract pending between Ford and Geely - his assumption ist that the share price will hit £ 40 !!! (I am based in Switzerland and cold calls are not prohibited in my country. I was laughing at him saying that this is all smoke and mirror...
Does anyone in the Fools universe know something about such a potential cooperation ?
Any feedback is appreciated.

marsuculix, who currently doesn't hold shares of Ford

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Author: TMFBreakerRob Big gold star, 5000 posts Old School Fool Home Fool Supernova Phoenix 1
Mission Team Member CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 17440 of 18134
Subject: Re: China! Date: 3/1/2013 11:17 AM
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This week a broker called at my office and told me that there is a contract pending between Ford and Geely - his assumption ist that the share price will hit £ 40 !!! (I am based in Switzerland and cold calls are not prohibited in my country. I was laughing at him saying that this is all smoke and mirror...
Does anyone in the Fools universe know something about such a potential cooperation ?
-- marsuculix

I haven't heard of anything since Ford sold Volvo to Geely.... but Volvos are still being built in Ford plants per the sales agreement.

Given Ford's overall strategy of developing multiple vehicles off a small number of platforms, I very much would doubt that Ford would want to sell any Geely vehicle and I find it difficult to see where Ford would want to sell vehicles built and designed by Ford to Geely (beyond the current Volvo legacy products).

Maybe a component sharing agreement? Could be, although I find myself doubting that Geely's quality meets Ford's expectations.

In any case, I can't see ANY agreement between Ford and Geely having a huge effect on Ford's performance or it's stock price. Geely just isn't all that important.

Now..... if BMW decided it would be great to be acquired by Ford, THAT would be a game changer..... but that's too much of a fantasy. LOL I'd say the broker's suggestion is also a bit of a fantasy as well. :)

Rob

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