Ford's China sales hit new high amid price war
Ford Motor, in a joint venture with China Changan Automotive Group, said yesterday sales rose to a record in the mainland last year despite a price war and a strong squeeze on profit margins.
Mei Weicheng, chairman of Ford Motor China, estimated sales of Ford's affiliated brands in the country at more than 220,000 units last year.
The vehicles produced by the joint venture had record sales of 61,013 units, a 41 per cent rise on the previous year. Sales of Ford vehicles totalled 82,225 units, an increase of 46 per cent.
The figures come as rival Shanghai Automotive Industry Corp - in a joint venture with Volkswagen - announced recently it had not made a profit in the first three quarters of last year, relying solely on last-quarter sales of General Motors vehicles from another joint venture to offset its losses.
Yale Zhang, a director at consultancy CSM Worldwide, said Ford stole a march on competitors by releasing several new models, including vehicles in its Premier Automotive Group such as Volvos, Land Rovers and Jaguars.
Mr Zhang said the new models had driven growth and that Ford's success had nothing to do with price cutting.
But he said Ford was likely to face stiffer competition in the second half of this year when Volkswagen released a new generation of vehicles on to the market.
Changan Ford recently completed a US$1 billion expansion plan at its Chongqing plant, boosting annual capacity to 150,000 units from 50,000. The firm expects that by the first half of next year, with a new assembly plant in Nanjing, total capacity may rise to 360,000 units.
A Merrill Lynch analyst said Ford had a low base for growth compared with Volkswagen, whose capacity was several times larger, but that its advantage was quick turnaround, allowing it to promote new vehicles every few months.
