Ford Asia begins to pay off - Ford Inside News Community
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post #1 of 6 (permalink) Old 10-06-2013, 10:14 AM Thread Starter
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Ford Asia begins to pay off

Ford's tilt toward China, Asia begins to pay off

On Oct. 7, 1913, Henry Ford's assembly line moved for the first time. A century later, among the changes in Ford Motor Co.'s production, none is more dramatic than simply where it takes place.

Ford vehicles assembled in China and the rest of Asia now outnumber those built in Europe for the first time. By 2015, Ford will have the capacity to produce more cars and trucks in Asia than it made last year in North America.

Wealth in Asia is surging even faster than it did in America after Henry Ford's manufacturing innovation and the five-dollar workday he introduced the next year. Just as when his Model T became the first car for millions of people, a burgeoning middle class in countries such as China means that at least two of three buyers in these markets are getting their first set of wheels.

"It's so aspirational and such a big deal," said Joe Hinrichs, who led Ford's manufacturing and Asia operations before taking over the Americas late last year. "It's the freedom that comes from the ability to own your own transportation that's never been had in your family. That's what it was like 100 years ago here."

Opening up the highways to these consumers is going to be lucrative business. Morgan Stanley said in a report last month that it values Ford's Chinese operations at $15 billion (92 billion yuan). That's more than a fifth of Ford's stock-market value and exceeds that of Mazda Motor Corp. and Fiat Group.

'Breathtaking' rollout

The rollout of Ford's factories, products and dealer network in China has been "breathtaking," wrote Adam Jonas, an analyst for Morgan Stanley.

Such praise is rolling in even though Ford was a straggler in China. The carmaker formed its first joint venture in China six years after General Motors and more than a decade after Volkswagen Group, which remain the established leaders among foreign automakers.

Attention is turning to Ford's Asia ambitions as auto sales in its home market are poised for a fifth straight year of growth for just the second time since World War II.

"Of all the regions of the world, that's the one that we're most" underrepresented, said Ford CFO Bob Shanks, referring to Asia. "That's where we've got the most absolute opportunity for growth."

Company CEO Alan Mulally set a plan with Executive Chairman Bill Ford, Henry's great-grandson, to build up the company's Asia presence early in their relationship. They discussed the topic in their first meeting at Bill Ford's home before Mulally, 68, agreed to leave Boeing Co. in 2006 and become Ford's chief.

At the end of Mulally's first full year at the helm of the company, Ford's market share in Asia was 2 percent. Through this year's first half, it's up to 3 percent.

A mid-decade target of 6 percent market share for Ford in China, from about 4 percent now, looks "potentially conservative," Itay Michaeli, an analyst at Citigroup Inc., wrote in a recent report. He cited demand for SUVs and the still-high presence of first-time buyers.

Capturing a bigger slice of Asian markets is crucial to Ford because of the heavy costs of playing catch-up there. Ford has said it's spending $4.9 billion to expand its lineup and double production capacity in China alone. Read More...
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post #2 of 6 (permalink) Old 10-06-2013, 10:44 AM
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Re: Ford Asia begins to pay off

Combine that growing success with the Lincoln success in china and elsewhere too soon.
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post #3 of 6 (permalink) Old 10-06-2013, 12:51 PM Thread Starter
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Re: Ford Asia begins to pay off

"There's probably another good 10 to 15 percent opportunity" for additional capacity from breaking bottlenecks in the manufacturing process, Fleming said. "And we've still got some plants that are only working two shifts. It's going to be enough for us over the next couple of years."

So it seems by 2016 Ford is planning to expand production in NA and upgrade the 'tariff free' Cuautitlan, Mexico plant to multi-platforms.

Motor Trend reports that with most of Ford’s plants worldwide being multi-model production facilities, one of its few remaining single-model plants looks poised to get a new product, with The Detroit News reporting that production of the next-generation Ford Fiesta from its plant in Cuautitlan, Mexico to Rayong, Thailand.

Ford is on track to sell 100k Fiestas for 2013, with that number increasing by 2016. Which means whatever models set for production at the 'tariff free' Cuautitlan, Mexico plant would need to have even higher sales to justify moving the 100k unit Fiesta to Thailand where Ford has to pay a tariff to import back to the US.

With MAP already at over 110% capacity, and still production is restricted for the Focus, Focus Electric, C-Max Hybrid and C-Max Energi, then there is the 50+mpg Prius Liftback competitor coming by 2016, the Cuautitlan plant is expected to match MAP configuration producing similar vehicles. Very much now Flat Rock(Mustang/Fusion) backs up Hermosillo(MKZ/Fusion) with the Fusion.
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post #4 of 6 (permalink) Old 10-06-2013, 11:11 PM
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Re: Ford Asia begins to pay off

Ford has a Prius competitor arriving in 2016? Does that just mean a Focus with no trunk space or a real Prius alternative from Ford?
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post #5 of 6 (permalink) Old 10-07-2013, 01:59 AM
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Re: Ford Asia begins to pay off

Originally Posted by DetroitBORG View Post
Ford has a Prius competitor arriving in 2016? Does that just mean a Focus with no trunk space or a real Prius alternative from Ford?
If it will be a real Prius competitor, it better be a global model just like the Prius.

Ford missing out in some segments in Asia (outside China)
I wonder why Ford decided to focus their attention on the B-segment EcoSport and not manufacture the new Escape/ Kuga in Thailand for ASEAN markets.
Right now Singapore and Malaysia are the only ASEAN markets to have the new Kuga and they are sourced from Europe.
Building them in Thailand would make it more competitive price-wise with its Japanese competitors.

The Last ASEAN Escape was made in the Philippines before the plant was shutdown at the end of 2012. It was in production for a decade, but now it looks like they just decided to focus elsewhere. Sad thing is a lot of people here in the Philippines have been asking Ford to bring in the all-new Escape/ Kuga.
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post #6 of 6 (permalink) Old 10-07-2013, 02:41 AM
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Re: Ford Asia begins to pay off

china has started ruling the world now, i fear it may cross the power of USA some day

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