Ford Reveals Asia Plan to Spur Its Global Growth

By : Subscribe to Erik's | May 9, 2012 11:28 AM IST

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Ford Motor is eyeing growth prospects in the Asia-Pacific region, specifically in China where car sales are expected to reach 30 million units over the next 10 years, reports said.

The U.S. parent company of Ford Australia looks to compete not only in the lucrative Chinese market but also in India, two countries that has been undergoing frenetic pace of industrialisation.

The direct result, according to market analysts, is the emergence of Asian consumers flushed with disposable cash, which in China alone, Reuters said, generated growth of up to 50 per cent in the local automotive industry over the past three years before settling at 2.5 per cent in 2011

And over the next decade, Ford Asia chief executive Joe Hinrichs is well aware of the expansion possibilities that await global companies whose business strategies were in line with the unique Asian market, or specifically that of the Chinese market.

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The central marketing for Ford, according to Mr Hinrichs, is for the carmaker to play it right in China and India, which lately have been saturated by entry-level car models that lure more buys from budget conscious consumers in the region.

Radical adjustments were but necessary, which could mean that Ford must go head-to-head with the lowest price offerings of car units in the two major Asian markets, where brand new models could roll out from dealers' outlet with a client paying only as low as $13,000, such as in China's case.

In India, customers flocked to local brands that go as low as $7,000, Mr Hinrichs said, admitting too that Ford has to rethink its strategy in the whole of the Asia-Pacific region in order to erect a viable competition stance against the established local car manufacturers.

The strategy is seen not to diminish the global Ford brand, Mr Hinrichs assured, as he stressed that by adopting prudent trimmings on the final product, which means less features on the Asian edition of Ford cars as opposed to their Australian and U.S. counterparts, Ford will remain viable in the region.

"I don't personally see any risk to the brand going more downward in the market because that's where the growth is and in Asia-Pacific, you've got to play there," the Ford executive told Reuters on Tuesday.

He noted too that all global companies aspiring for further growth look to the East, specifically in China, with even the Apple chief executive admitting in April that despite the incredible results his company had racked in the previous quarters, its China performance needs more room for improvements.

As Apple rests its China thrust on the million-selling iPad and iPhone, Ford, according to Mr Hinrichs, is set to anchor its play in China on the Ford Fiesta, which currently retails in Asia carrying a price range of between $12,300 and $17,500, the latter being the top-of-the-line series.

Fiesta was preceded by the Ford Focus, which entered the Chinese market in April, and will be followed by 15 new models that will be introduced over the next three years, Mr Hinrichs said.

Ford has specific target market for the motor vehicles, which are consumers located in the inner Chinese cities and away from the usual prosperous coastal town, he added.

"The growth expected the rest of this decade in China is largely to come from the central and western parts of the country which is more value-oriented," the Ford Asia chief told reporters in a news briefing held Tuesday.

This early, the company has seen considerable success as its sales last month surged by 24 per cent, with many Chinese snapping up a total of 54,881 Ford units in the month on the back of heavy demands for the Focus.

Ford Focus, along with the Fiesta and Mondeo, were all being assembled in China, on the strength of the company's existing partnership with Mazda Motor of Japan and Chongqing Automobile of China.

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