Ford Motor Co. (F) revealed that it will launch 15 new models in China by 2015 in order to accelerate its expansion plan in the country. The company also stated that it will double its dealerships in China over the next 5 years from 340 currently. Last year, the automaker has added 106 dealerships in China as a part of its expansion plan.
In order to keep pace with the expansion, Ford recently announced to double its workforce by hiring 1,200 employees by 2015. The company is building a new plant with its joint venture Changan Ford Mazda Automobile Co. in Chongqing.
The automaker also broke ground for a $ 300 million vehicle plant with another Chinese partner, Jiangling Motors, which is capable of producing up to 300,000 units annually. The facility is scheduled to start operations at the end of 2012.
Ford manufactures Focus, Fiesta, Mondeo and other models in China in a joint venture with Chongqing Changan Automobile Co and Mazda Motor Corp., known as Changan Ford Mazda Automobile Co. It also holds a 30% stake in Jiangling Motors Corp. – based in the central province of Jiangxi Ltd. – that makes light commercial vehicles.
Ford has been pursuing a major expansion plan in the emerging countries, including Argentina, Brazil, China, India and Thailand. Through the expansion plan, the automaker aims to tap the growing market potential in the countries, especially those in Asia.
The company expects 70% of its growth to come from the Asia Pacific and Africa region in the next decade. Since last year, Ford has invested $ 510 million in China and $ 500 million in India as part of its expansion plan.
Ford’s sales in China grew 40% in 2010 driven by higher sales of Focus compact and Fiesta subcompacts. Changan Ford sold 403,283 vehicles, an increase of 34% from the last year. Meanwhile, Ford’s commercial vehicle venture in China, Jiangling Motors Corp., reported an impressive 56% rise in sales to 178,999 units. Ford’s domestic rival, General Motors Co. (GM), posted a 29% increase in sales in the country to 2.35 million vehicles in 2010.
J.D. Power and Associates has predicted sales in China to grow by 10.5% for 2011. According to the China Association of Automobile Manufacturers, annual vehicle sales in China may rise to 25 million units by 2015, which is a third of world’s total.
Ford, a Zacks #3 Rank (Hold) stock, posted a 24% fall in profit to $ 1.2 billion or 30 cents per share (before special items) in the fourth quarter of 2010 from $ 1.58 billion or 43 cents per share (before special items) in the same quarter of 2009. With this, the automaker has missed the Zacks Consensus Estimate by 19 cents per share.
The decline in profit was attributable to lower year-over-year revenues generated by the company’s automotive operations as well as the financial arm. Total revenue during the quarter ebbed 7% to $ 32.5 billion. However, excluding revenues from Volvo, sales improved by $ 1.6 billion or 5% from the fourth quarter of 2009.
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