Asia Pacific Africa
“Ford’s strategy in Asia Pacific Africa is to grow aggressively with an expanding portfolio of global One Ford products with manufacturing hubs in China, India and ASEAN…
…In the fourth quarter, wholesale volume was up 29 percent from a year ago, and net revenue, which excludes the company’s China joint ventures, grew 16 percent. Ford’s wholesale volume in China was up 45 percent in the fourth quarter and about 50 percent for the full year. The higher volume in the region mainly reflects improved market share. Higher industry volume, increasing from a SAAR of 33.1 million units to 38.1 million units and favorable changes in dealer stocks also contributed. Higher revenue primarily reflects favorable volume and mix.
Fourth quarter market share in the region was 3.9 percent, half of a percentage point higher than a year ago and a quarterly record. The improvement was driven by China, where Ford’s market share improved half of a percentage point to a record 4.4 percent, reflecting mainly strong sales of EcoSport and Kuga.”
— Ford’s fourth-quarter press release, January 28
Ford (F) continues to execute nicely in China. On Tuesday, the automaker said that Ford Motor Co and its Chinese joint ventures sold 103,815 vehicles in the country in March 2014, up 28% from a year earlier. The leap follows a 67% increase and 53% jump on a year-over-year basis in February and January, respectively. During all of the first quarter, wholesale volume ramped 45%, and the auto maker’s units sold in China during the period came in only 1% shy of Hyundai and 4% fewer than Nissan:
After passing Toyota Motor (TM) in China for the first time last year, Ford has climbed to within striking distance of becoming the third-largest foreign automaker in the country. While it got a late start in the market relative to General Motors (GM) and Volkswagen, Ford plans to spend $4.9 billion to double production capacity there and has been expanding faster than any major competitor since mid-2012 thanks to the popularity of its sport utility vehicles and the Focus car. Source: Reuters.
Clearly, Ford has the correct formula for the Chinese market as it continues to gain share against its rivals, though we note Volkswagen and General Motors boast market share in the teens (compared to Ford’s mid-single-digit levels). Still, the company’s dealer network in the country continues to fire on all cylinders, and its joint-venture relationships are working wonderfully. Though the risk remains that Chinese cities may slow down new vehicle purchases for environmental reasons, we think Ford’s formula in China will allow it to continue to take share. We expect the auto maker to turn some heads with its smart technologies across its product line at the Beijing Auto Show in April as well. We like the fundamental momentum at Ford in China, and the company remains a holding in the portfolio of the Best Ideas Newsletter.