By John Rosevear, The Motley Fool
Filed under: Investing
Changan Ford general manager Nigel Harris presented the Focus ST at last year’s Auto China show. The high-performance Focus ST is the latest variant of Ford’s hot-selling Focus to arrive in China. Photo credit: Ford Motor Company
There’s no doubt that Ford has had a lot of success in China lately.
The latest Ford Focus, introduced in China last spring, has been a huge hit – big enough to make the Focus the world’s best-selling car in 2012, according to analysts at R.L. Polk.
But the Focus was just the first of a wave of new Fords set to come to China over the next few years. The Kuga SUV, a twin to the Escape sold here, arrived in February – and sales have already been strong.
How strong? This strong: Ford’s sales in China are up 54% so far this year. In just a few short years, Ford has gone from near-invisibility to outselling Toyota in China.
But can Ford’s Chinese operation catch up to longtime nemesis General Motors , which has had a huge head start?
GM is already one of China’s giants
It’s a daunting proposition. In terms of total vehicle sales, GM is the China market leader, with archrival Volkswagen close behind. GM had a commanding 15.6% share of the Chinese market last year, outselling Ford by more than six to one. VW was second with 14.5%.
But many of those sales aren’t “passenger vehicles”, they’re small commercial vans. GM has a stake in a joint venture that makes inexpensive little commercial vans sold under the Wuling brand name. It’s a minority position, and it doesn’t make a ton of money for the General, but it comes with something GM values very highly – the right to count all of Wuling’s sales as GM‘s.
But if you factor out the Wulings, it’s VW that looks like the top dog. According to LMC Automotive figures cited by Reuters, VW had 19.5% of China‘s passenger vehicle market last year, to GM‘s 10%.
But no matter how you slice it, catching up to GM will be a daunting task for Ford. The Blue Oval had a 3% market share in China in 2012, about the size of Subaru’s presence here in the U.S. And while Ford has already gained ground – the company had a 3.6% share in the first quarter of 2013 – it clearly has a long way to go to catch up to GM.
Ford is investing big for major growth
That said, Ford has geared up to expand in a big way – but not in pursuit of GM, necessarily. Instead, the Blue Oval is in pursuit of profit growth. Ford has been investing big in new factories, new engineering centers, and infrastructure in China and other parts of Asia.
Despite that big investment – almost $5 billion – Ford’s Asian operation, the bulk of
From: http://www.dailyfinance.com/2013/04/17/can-ford-beat-gm-in-china/