One Hour China | Post-divorce, Chang'an Ford has lost weight and is looking good
Despite a late entry to the market, Ford's China investment holds important lessons for multinationals
Just one year after its split from Mazda, Ford’s recent performance in China is starting to turn heads.
In December 2012, the Chinese government approved the split up of the three-way joint venture between Ford, Mazda and Chang’an Automobile. This resulted in the newly created Chang’an Ford joint venture which went on to sell an impressive 935,000 cars in China in 2013. That was a 49% increase year-over-year. And is up from only around 400,000 as recently as 2010.
Post-divorce Chang’an Ford is looking good – and is turning into a China business story with some important lessons for multinationals.
Lesson #1: You don’t need to get to China early to win.
While Ford established its initial joint venture with Chang’an Automotive Group in 2001, operations didn’t begin until 2003 and they only really started producing cars in significant numbers in 2005 (61,000 sold in 2005).
This is in comparison to General Motors which established its joint venture with SAIC in Shanghai in 1997. And was long after VW launched its China joint venture in 1984. By most measures, Ford came to China about a decade late.