Wednesday, August 29, 2012

New Plants in China: Ford Motor Company (NYSE:F) Stepping on the Gas

Ford Motor Company (NYSE:F) is on a capacity expansion spree in China.  On Monday, it broke ground for a $6 million plant in the southwestern city of Chongqing.  Wednesday saw another groundbreaking ceremony, that of a new assembly plant in Hangzhou, a city on China’s east coast.

This second plant is really critical for Ford according to CEO Alan Mulally, who also praised the city for its excellent infrastructure and trained work force.  What Ford will manufacture there is anybody’s guess though!

As of now, Ford has only 7 vehicles in China, far lower than GM’s 30.  This is going to change soon, with Ford planning to introduce 8 new vehicles, one of them being a car similar to the Chevrolet Sail, which starts at $10,000.

The small SUVs EcoSport and Kuga will be launched as early as next year. Ford’s current crop of cars in China are all expensive, the cheapest being the Ford Fiesta, which starts at $13,316.  Ford China CEO Dave Shoch admits that “we have been playing at the higher end”.

Although Ford sells the subcompact car Figo in India, there are no plans of introducing it in China, the car’s right hand drive being one of the reasons.  Surprisingly, Ford does not have any plans to introduce new low priced brands like its competitors GM, Volkswagen and Nissan have done, as it thinks that there is a brand glut.

China’s new plants will surely enable Ford to gain a greater foothold in the world’s largest auto market.

No comments:

Post a Comment

Privacy Policy | Legal Disclaimer