Changan Ford Mazda Automotive, the three-way joint venture among Ford Motor Company (F), Changan Automobile Group and Mazda Motors recently laid the foundation for a $350 million transmission plant in Chongqing, China. With the new development, the joint venture's investment in China amounted to $3.5 billion since its formation a decade ago.
Ford is pursuing a major expansion plan in the mature and emerging markets of Argentina, Brazil, China, India and Thailand. Since 2009, the automaker has invested more than $510 million in China and $500 million in India.
Recently, the company revealed its expectation of global sales growth of 50% to 8 million vehicles by 2015 based on the immense potential in Asia, particularly China and India; and the rising demand for small cars. The automaker anticipates small cars to account for 55% of total sales by 2020, compared with the present level of 48%. The company estimates one third of the small car sales to come from Asia.
In 2010, Ford entered into 40 new dealership agreements in China as part of its expansion plan. In order to support increasing sales, Ford aims to triple its dealerships to 340 in India and double in China (adding 100 dealerships this year) to 680 by 2016.
The company has also announced investment plans worth $800 million in Rayong, Thailand through its Auto Alliance joint venture plant with Mazda Motors; $850 million for the upgrade of its manufacturing facilities located in Michigan; and $920 million in its Kocaeli production facility in Turkey (jointly with Koç Holding); $955 million in Craiova, Romania and $1.2 billion in Valencia, Spain.
Ford reported its second quarter financial results on July 28, 2011. The company realized a profit of $2.64 billion or 65 cents per share, a $67 million or 2.5% decline from $2.70 billion or 68 cents per share in the corresponding quarter of 2010. Revenues in the quarter appreciated 13% to $35.5 billion, driven by higher contribution from the Automotive segment.
The decline in profit was due to an anticipated slump in Financial Services results. The automaker has already cautioned its investors in the near term about the non-recurrence of lower lease depreciation expense and lower credit loss reserve reductions in 2011 compared with 2010. It revealed that these two items are expected to impact the company’s profit by $1.1 billion in 2011 on a year-over-year basis.
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