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Ford Drives Hopes into Chinese Auto Market
The early bird gets the worm. But Ford Motor Company, the late comer to China's car market, is still optimistic about its chances.
Jacques Nasser, Ford's president and chief executive officer, said that the world's second largest automaker is deeply confident of its place in meeting the growing auto demand.
Ford has made a long-term commitment to the country and wants to engage in domestic car production as soon as possible, Nasser said.
Outmaneuvered by rival General Motors (GM) for a role in a Shanghai auto venture in 1997, Ford has so far been shut out of China's mainland sedan market.
The bulk of China car market has been taken up by other global automakers, such as Volkswagen and GM.
But now Ford is striving to establish a joint venture with Chang'an Motor Corp in Southwest China's Chongqing, which currently co-operates with Suzuki, a GM member, to produce family vehicles.
Nasser said the project, which has been submitted to the Chinese Government, is now under feasibility studies and negotiations.
The CEO said that Ford will introduce a model to Chang'an with a size between GM's Buick New Century and Fiesta, a compact car that Ford manufactures in Europe.
Auto analysts said the model most likely to be chosen is Ikon, a small-sized car launched in late 1999 for Asian markets by Ford.
Ford showed Ikon to Chinese consumers, eager to realize their four-wheel dreams, at the Auto China 2000 Exhibition at the beginning of June.
Nasser said he also believes that Ford's auto production in the proposed joint venture would contribute to the development of China's western regions.
The Chinese Government has called for an all-out effort to develop the area, making it a new "hot spot'' for global investors.
Nasser said Ford's pullback from a bid for South Korean Daewoo Motors will not affect its China strategy.
Ford recently abandoned Daewoo Motors because of the insolvent company's bigger-than-expected debts. GM is still bidding for the company.
But analysts said Ford was eager to land Daewoo's strong presence in China when the company was named the sole bidder four months ago.
Vaughn Koshkarian, president of Ford (Asia Pacific), admitted that the company had wished to obtain Daewoo Motors' foothold.
Daewoo Motors has a US$1 billion auto parts manufacturing base in Shandong Province, the largest of its kind in China.
Although small-sized cars have a promising future in the country as they are more affordable for Chinese families, analysts said Ford faces stiff competition from other global auto giants.
GM, the world largest automaker, also plans to launch a compact car named "Sail" priced at around 100,000 yuan (US$12,000) through Shanghai GM by the end of this year.
German automaker Volkswagen, which has taken more than 50 per cent of China's auto market, is to bring a compact model into the Shanghai Volkswagen automobile Co Ltd within two years.
Japan's Toyota is expected to produce Vitz and Platz, two globally strategic compact cars, by its Tianjin joint venture starting in 2002.
Ford holds less than 1 per cent of China's auto sector with a total investment of US$200 million. It now produces Transit commercial vehicles in its joint venture in East China's Jiangxi Province.
Ford, the world most profitable automaker, reported a net income of US$888 million during the third quarter of this year, compared with GM's US$829 million. [Source: chinadaily.com.cn]
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