Ford Motor Co. (F) posted a meager 3% rise in sales to 44,340 vehicles in China in April. The company’s joint venture partner in China, Chongqing Changan Automobile sold 33,184 vehicles during the month. This has brought the total sales to 184,906 vehicles for the first four months of the year, an increase of 15% from the year-ago quarter.
In contrast, Ford reported a 24.5% increase in sales to 182,542 vehicles during the same month in the U.S. The company’s sales were driven by Chevrolet Malibu, which saw the largest sales increase of 49.4% to 24,701 units, Buick LaCrosse (8%) and F-150 (11%).
Recently, Ford revealed its plan to invest 7 billion yuan ($1.1 billion) in China in order to expand production capacity. The automaker will enhance the production capacity at its new plant in Chongqing, operated by Changan Automobile, to 650,000 units by 2012. It will also increase power train and engine capacity to 750,000 units from 400,000 units in the country.
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. Since last year, Ford has invested $510 million in China and $500 million in India as part of its expansion plan.
Last year, Ford has added 40 new dealerships in China as a part of its expansion plan. Further, the automaker plans to add 66 new dealerships by the end of the year, raising its total dealerships to 340 in the country.
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 6.3% increase in sales in the country to 2.35 million vehicles in 2010. In April, GM and its ventures sold 213,115 vehicles in China.
Sales of the company’s flagship venture Shanghai GM scaled up 7.4% to 96,219 vehicles in April. This was offset by slowing sales growth for its other China operations. In the first four months of 2011, the automaker’s rose 6.3% to 888,950 vehicles. J.D. Power and Associates has predicted sales in China to grow by 10.5% for 2011.
Ford, a Zacks #3 Rank (Hold) stock, revealed 48% rise in profit to $2.61 billion from $1.76 billion in the same quarter of 2010. On earnings per share basis, profits rose 35% to 62 cents per share from 46 cents per share a year ago, thereby topping the Zacks Consensus Estimate by 12 cents per share.
The rise in sales was attributable to the company’s One Ford plan, which relies on fuel-efficient lineups, continued investment in global assets, efficient management and strengthening of core businesses, which has offset the negative impact from not-so-favorable economic condition as well as earthquake and tsunami in Japan.
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