Ford's Focus Drives More Gains in China
Ford's impressive string of gains in China continued in April: The Blue Oval posted a 37% gain over the year-ago month, paced by continued strong sales of the Focus compact and the Kuga SUV.
The Kuga, a twin in all but name to the familiar Ford Explorer, sold nearly 10,000 units in just its second full month on the Chinese market.
Ford's sales gains have outpaced the overall Chinese market by a big margin so far in 2013. It's a promising trend for Ford as it prepares to roll out even more of its global lineup to China's increasingly savvy consumers.
Strong Focus sales continue to lead the way for Ford in China
The Focus continues to be a great story for Ford in China. Sales in April were up 41% versus the year-ago month, as the attractive compact continued to sit close to the top of China's auto-sales charts.
So far this year, Focus sales are up 114%, an astounding number - but one that needs a bit of explanation. Ford actually sells two different cars called "Focus" in China. One is an older model - the last-generation European Focus, which is called "Classic Focus" and sold as an entry-level car.
The other is the familiar global model as sold here in the U.S., called "New Focus". Ford reports the sales numbers for the two as a single total, which can be a little confusing. It also means that the incredible sales gains for the year to date need to be put into this context: The "New Focus" didn't go on sale in China until last April, and wasn't fully up to speed until May.
Put another way, that 114% year-to-date gain reflects a comparison to a period when Ford was selling only the "Classic Focus" in China, not the widely acclaimed new car. We'll have a better indicator of the Focus's growth in China when Ford reports May sales next month.
SUVs are hot in China, and Ford now has plenty
Ford is poised for growth on other fronts in China, though. The market for SUVs has been white-hot in China lately, and Ford has responded with several entries from its global portfolio.
Ford has been selling the Edge SUV in China for a while, but sales have been subdued. That's likely due to its high price: Ford imports the Edge from the U.S., and China places heavy tariffs on imported vehicles.
But the Kuga - the SUV we know as the Escape - doesn't have that handicap, because the Kugas that Ford is selling in China are made there. That's also true of the EcoSport, a small Fiesta-based SUV that isn't sold here in the U.S., but is popular in South America. Both were added to Ford's China lineup in the first quarter of 2013.
Ford also added its big Explorer SUV to its China lineup earlier this year, but those Explorers are being imported from the U.S. and prices are very high. While the Explorer starts at a little over $29,000 here, those tariffs mean that prices for Chinese customers are in a completely different league - around $78,000, for starters. It's fair to say that Explorer sales are likely to be slow for Ford in China.
The best investing approach is to choose great companies and stick with them for the long term. The Motley Fool's free report "3 Stocks That Will Help You Retire Rich" names stocks that could help you build long-term wealth and retire well, along with some winning wealth-building strategies that every investor should be aware of. Click here now to keep reading.
The article Ford's Focus Drives More Gains in China originally appeared on Fool.com.Motley Fool contributor John Rosevear owns shares of Ford. Follow him on Twitter at@jrosevear. The Motley Fool recommends Ford. The Motley Fool owns shares of Ford. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.