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Author: TMFBreakerRob Big gold star, 5000 posts Old School Fool Home Fool Supernova Phoenix 1
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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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