Manufacturing News

Ford playing catch up in Asia, but sees fast growth

Ford Motor Co. is banking big profits in its home market today, but the company is betting on Asia – a region where it still trails rivals – to drive long-term growth tomorrow.

Joe Hinrichs, who heads Ford's Asia Pacific and Africa operations, said his business is small compared to Ford's sales and manufacturing footprint in Europe and the Americas.

But Ford invested $3.5 billion in his region – which includes China, the world's biggest auto market, and rapidly growing India – over the past three years to change that.

"The majority of our growth over the next 5 to 10 years will come from our region," the Shanghai-based Hinrichs said in an interview at the Beijing motor show.

Ford was a late comer to China and still trails competitors there, including General Motors, Volkswagen, Toyota and Hyundai. Ford sold just 440,000 vehicles in China last year, compared with 1.83 million sold by GM, now the country's biggest automaker.

In the first quarter of 2010, however, Ford sales in China rose 84 percent to 153,362 vehicles, outpacing a 71 percent climb in China's total light vehicle sales. Ford is opening a new assembly plant in China with its local joint venture partner, Changan Automotive Co. And the company will add 70 dealers in China to boost its local retail network to 350 this year.

In India, Ford's sales tripled in March, over year earlier. It is targeting 200 dealers in the Subcontinent by year's end, up from 136 at the end of 2009. Ford doubled production capacity at its Indian plant in Chennai last year to launch the new Figo small car in the market.

Ford is on a roll in the United States. Its market share there climbed to 17.4 percent in the first quarter, from 14.7 percent a year earlier, the biggest point increase of any major player. Sales jumped 37 percent to 441,708 vehicles, and it booked a $2.1 billion quarterly net profit.

But of the company's four main business regions, including North America, South America, Europe, the Asia Pacific and Africa operations chipped in the smallest operating profit in the latest quarter. It generated $23 million, compared with North America's $1.2 billion.

Hinrichs said Ford had neglected Asia and Africa over the past five years as it grappled with averting bankruptcy, selling off brands such as Volvo and Jaguar, developing the One Ford global brand strategy and surviving the global financial crisis.

"We had a few things going on," Hinrichs says. "Now we are turning a lot more of our corporate resources and attention to this market."

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