Ford encounters pricing pressure as China auto market slows

Article by Christian A., on August 10, 2011

As the auto market in China slows, the pricing pressure on Ford Motor Co. increases. At the JP Morgan auto conference in Detroit, Joe Hinrichs, Ford's group vice president and Asia chief, said that during the past 3 or 4 months, the rate that the industry is growing is not the same as it was last year or in the first quarter of the year.

Ford has invested $1.6 billion to produce four factories in China, where it plans to triple its lineup by releasing 15 models by the middle of the decade.

J.D. Power & Associates said that Ford has 2.7% of the passenger-vehicle market in China through June, falling behind General Motors Co.'s 10% share.

Ford continues to depend on the U.S. and Europe for the majority of its sales and profits. Hinrichs said that Ford expects the Chinese government to later implement measures to encourage auto sales.

So far this year, Ford's sales have gone up by 13% to 14%, doing better than the 5% growth rate in the market. He added that this growth rate is “not nearly as aggressive" in China as in previous periods.

Ford predicts Chinese sales to climb by 5% to 10% each year over the next five years. Hinrichs shared that Ford's costs in China have the same value as that of its rivals.

Hinrichs clarified though that Ford still expects to be able to compete in China. Last June, CEO Alan Mulally said that by 2015, growth in Asia will help boost annual global sales by 50% to 8 million vehicles.

From January to June 2011, Ford earned $4.95 billion. Despite the slowing U.S. auto market, Ford has attracted numerous buyers for its fuel-efficient models such as the Fiesta subcompact.

Topics: ford, china

If you liked the article, share on:

Comments

Recommended

One of the executives at Volkswagen tagged in the so-called Dieselgate scandal has pleaded not guilty to a list of allegations surrounding the carmaker’s actions to cheat emissions regulations in...
by - February 27, 2017
When the Crown De Luxe saloon was first released in 1972, it was at that time the most lavish Toyota model available to British customers. Both unusual and exclusive, one...
by - February 27, 2017
The ride-sharing fleet of sharing Lyft Inc. will soon include thousands of specially fitted self-driving Chevrolet Bolt electric vehicles, courtesy of General Motors. If plans push through, Lyft’s clients would...
by - February 27, 2017
J.D. Power has officially released the 2017 Vehicle Dependability Study, an annual list of the most dependable brands in the auto industry. Once again coming on top is Lexus, the...
by - February 26, 2017
Citroen revealed that its entry to the Chinese market is moving forward with the planned release of the new generation C5. While still on sale on this part of the...
by - February 26, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries