Ford Keeps Rolling in China

Last month was another strong one for Ford in China. The Blue Oval's Chinese venture reported a monthly sales record in December, with more than 70,000 vehicles sold.

That's a 43% increase over year-ago figures. And it's a fine cap to the year for Ford, which sold more than 625,000 vehicles in China in 2012, a 21% year-over-year increase.

How will Ford build on that success in 2013?

One big success. More on the way?
Here's a clue: Ford's compact Focus accounted for nearly half of those sales. In December alone, Ford shipped 36,868 cars wearing the Focus nameplate to its Chinese dealers -- versus 22,604 Focuses sold here in the United States.

Of course, that's not exactly an apples-to-apples comparison, because Ford sells two separate cars named "Focus" in China. There's the "New Focus," which is the current car sold here and in most of the rest of the world as the Focus, and the "Classic Focus," which is the last-generation model, offered as a less-expensive alternative.

But still, the Focus, in both flavors, has been a big hit for Ford in China, especially since the "New" version was introduced last spring. So how will Ford build on that success in 2013? By bringing more of its well-regarded global models to China.

The beginnings of a huge expansion in Asia
Last year, Ford said it will introduce 15 new vehicles in China by 2015. The New Focus, launched in China last April, was the first of those, and Ford is betting that Chinese consumers will also be receptive to its other acclaimed global models. It's about to be joined by the Kuga -- an SUV that's identical in all ways but name to the Escape that launched here in the U.S. last summer -- as well as the Ecosport, a small SUV aimed at emerging markets.

The Kuga is expected to hit dealers this month, and it will join a growing lineup of models that are (mostly) familiar to Americans: Ford's SUVs, which have been a hot-selling category in China recently, even as the overall auto market has slowed. Ford's Edge, which it imports in modest numbers, has flown the Blue Oval's SUV flag for a while. But soon it will be joined by the Kuga and another familiar-to-Americans face: The Explorer, one of the company's best-sellers here at home.

Cars haven't been neglected, either. Besides the Focus, Ford already sells its smaller Fiesta in China -- it's the company's second-best seller. There's also the Mondeo, a midsized sedan developed originally for the European market, and one that's about to be replaced by an all-new car -- one that will be called Mondeo but is otherwise identical to Ford's well-regarded U.S. Fusion sedan.

The upshot: A key part of Ford's global plan
Ford's success in China is important because growth in China is absolutely key to Ford's long-range global plan. The company has said that it expects 70% of its overall growth to come from Asia and Africa by the middle of the decade -- much of that from the Chinese auto market, now the largest in the world.

Ford was very late to the Chinese auto party, arriving years after rivals such as General Motors , Volkswagen , and Toyota had established major presences in the Middle Kingdom. Many analysts questioned whether the company would be able to win significant market share in the face of such strong, established competition.

Ford still has a long way to go before it catches up to VW and GM, the twin titans of the Chinese auto market -- each sold more than four times as many vehicles in China as Ford in 2012. And Ford's ongoing heavy investments in the region will continue to put a damper on its profits for a while. But the company's strong growth in the sluggish market is a bright spot for its growth prospects -- and, in time, its overall profits -- over the next several quarters.

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