Ford in China (1): mid-term business/model plans and development/sales structures

Ford aims for sales of 1.5 million units, 8% share by 2015-2020

2011/11/16

Summary

 Though Ford forecasts sales of below 400K units in 2011 in China, it aims to sell 1.5 million units by 2020. To achieve this, Ford plans to launch 15 new models from 2012 to 2015.

  Ford is reorganizing Changan Ford Mazda Automobile, its key joint venture. Upon receiving approval by the Chinese government, Ford expects to establish Changan Ford Automobile with Changan Automobile Group on a fifty-fifty basis by the end of 2011. On the other hand, Mazda will establish Changan Mazda Automobile. In addition to expanding the production capacity of its main plant in Chongqing, Ford is building a new joint venture plant with Jiangling Motors in Xiaolan, Nanchang city, and planning to build a new passenger car plant in Tianjin (proposed site) to increase production capacities for Ford brand vehicles.

  The following is on Ford’s recent activities in China regarding to its latest medium-term business plan, development and sales structure, and model plan.
  For Ford’s latest finished vehicle and engine production structure, etc. in China, please refer to ”Ford in China (2): plans to enhance vehicle and engine production capacity” which was issued on November 28, 2011.

Ford's business plan in China

Outlines
Sales ・From 2015 to 2020, Ford aims for an annual sales of 1.5 million units (including sales of imported products and export of China-made vehicles) and a market share of 8% (3% as of September 2011).
・Ford will expand sales in various parts of China (except in large cities) by 2015.
(The 2010 sales in markets of the western part of China were up by 59% over the previous year.)
・Ford will strengthen its tie with Changan Automobile Group in global business such as jointly developing overseas markets.
Model ・Based on the concepts of quality, green, energy saving, safety, and smart, Ford will strengthen its product lineups of China-made vehicles (in other words, penetrate into each segment more than before) to expand its share in the Chinese market.
・Ford will introduce a total of 15 new models over four years from 2012 to 2015 (of which about ten models will be produced at the Chongqing plant).
・Ford will enter into the Chinese high-end vehicle market with its Lincoln brand models (before local production, it will start the import and sale of these models soon).
・Ford will accelerate its launch of low-end model vehicles.
Environmental responsiveness:
・HV/PHV/EV models developed by Ford will be proactively introduced into the Chinese market.
・By 2020, Ford will improve emission gas levels of all its models, and reduce CO2 emission by 30% from the May 2010 level.
  ・Ford will expand its installation of high efficiency powertrains such as the combination of a new type direct-injection turbo engine (EcoBoost GTDI) and the PowerShift transmission (DCT). *See the NOTE.
・Ford started the test run of three environmental responsive models (Transit Connect [EV], Escape PHV, and Fusion HV) in several cities of China in April 2011.
・Ford plans to produce electric passenger cars (HV, PHV, and EV) at Changan Ford Automobile. The production will be expanded to a certain scale by 2020.
Production ・Ford will develop Changan Ford Automobile Co., Ltd. (a joint production base in Chongqing) which will be the major production base next to its Detroit base.
・Ford will raise Jiangling Motors Co., Ltd. (a joint production base in Nanchang) to the world's leading commercial vehicle base. The joint company will also strengthen the production of Ford brand passenger cars.
・Ford will establish a joint venture company with Changan Automobile Group in Taiyuan, Shanxi province to enter into the medium- and heavy-duty commercial vehicle business in China.
 

・Ford will invest 1.6 billion U.S. dollars to build a total of four plants, three plants for finished vehicles, engines, and transmission in Chongqing, and a finished vehicle plant in Nanchang. These plants will start running by 2013 (as of the end of September 2011, the construction of all plants have already started).

Source: Press release of Ford Motor (China), other various media reports
*Note: Some reports say that, in 2013, Ford will mount the EcoBoost GTDi engine nearly 80-90% of all models globally sold, including China.

 RemarkOn November 21, 2011, Ford has announced the Powertrain Strategy of the Changan Ford Automobile, its Chinese joint venture company.   For details, please refer to related news article.

 



Reorganization of Changan Ford Mazda Automobile

Ford and Mazda each with Changan Automobile to establish new venture companies in Chongqing and Nanjing

 The draft project agreed among Ford, Mazda, and Changan Automobile Group in 2009 for reorganizing Changan Ford Mazda Automobile Co., Ltd., a joint venture of these three companies, was basically approved by the Chinese government (National Development and Reform Commission) in August 2011. The reorganization is expected to be officially approved by the end of 2011 and completed in 2012, if all goes well. The current capital structure of the joint venture is composed of 35% by Ford, 15% by Mazda, and 50% by Chongqing Changan Automobile owned by Changan Automobile Group.
 According to the reorganization plan, the Chongqing plant of Changan Ford Mazda Automobile will become Changan Ford Automobile Co., Ltd. which Ford and Chongqing Changan Automobile will own on a fifty-fifty basis; and the Nanjing plant will become Changan Mazda Automobile Co., Ltd. which Mazda and Chongqing Changan Automobile will own on a fifty-fifty basis. In short, the Nanjing plant will be shed from Ford's Chinese joint venture plant.
 Before the reorganization above, Changan Ford Mazda Automobile submitted its reorganization plan to the Chinese government in May 2010, but the initial reorganization plan was denied because business plans, such as the development center and own brand model plans, which were required for approval, were not included. (See the following.)

Source: Interview by MarkLines, etc.

 



Development structure: Ford to strengthen development of joint venture company's own brand vehicles and build development center in Nanchang

Ford to strengthen development structure in China to develop joint venture company's own brand vehicles

 Ford unveiled its plan to strengthen its local development structure in China in April 2011. For the time being, Ford will accelerate the launch of additional Ford brand models; however, it is considering to develop Changan Ford Automobile own brand vehicles and launch them over a medium term.
 Ford wholly owns Ford Motor Research & Engineering (Nanjing) Co., Ltd., an automotive engineering center capitalized at 11 million U.S. dollars in Nanjing Jiangning Economic & Technological Development Zone. The company is mainly engaged in the following: engineering technology development and testing for vehicle and component production and localization, development technology transfer, technical training, and consultation for component procurement.

Source: Beijing Times (Sep. 29, 2011), Auto Business (Sep. 21, 2011), etc.

Jiangling Motors: to build development center and test course in Nanchang, Jiangxi province

To start building development center in Nanchang Xiaolan Industry Park

 Jiangling Motors unveiled its plan in June 2011 to build a new product development center (Jiangling Motors Products Development Technical Center) in Xiaolan Industry Park (the current Nanchang Xiaolan Economic & Technological Development Zone) in Nanchang, Jiangxi province. The first phase construction is planned to be completed within the first half of 2013.
 The total investment is 424 million yuan (RMB) for the first phase of construction; a testing center, which includes a product development building, test plant, and NVH (Noise, Vibration, Harshness) laboratory, will be built.

Jiangling Motors: to build its first vehicle test course in Xiaolan Industry Park in Nanchang

 Earlier, Jiangling Motors unveiled (in September 2010) its plan to build its first vehicle test course in the Xiaolan Industry Park in Nanchang, Jiangxi province. It will invest about 79.63 million yuan (RMB) to build the facilities. Jiangling Motors says that it will be completed in the first half of 2013.

Source: Annual report (the first half of 2010) and press release (Sep. 17, 2010) of Jiangling Motors, etc.

 



Model plans: Ford to launch nine new models at Chongqing plant and ten models at Nanchang plant

Ford's model plan at its Chinese joint ventures (December 2010 to 2015)

Changan Ford Mazda Automobile’s Chongqing plant (after reorganization, it will be Changan Ford Automobile Co., Ltd.)

Models Launch year Details
2011 2012 2013 2014 2015
Mondeo
Zhisheng 2.0T 2011 model-year
March  This is equipped with the 2.0 L EcoBoost GTDi engine and PowerShift 6-speed transmission (DCT). Its fuel consumption and emission gas have been improved by 20% and 15%, respectively. The price is ranged from 199.8 to 217.8K yuan (RMB).
New Focus Launch  The Focus (Ford's global strategic model) is fully remodeled. It will be produced at the new Chongqing plant. This model will contain 80% of Ford's globally standardized parts.
Low-price
new car
2012 or later   This is a low-price car which will use the 2004 Focus MK2 platform. This new low-price car is intended to cover the Chinese inland markets which Ford is developing.
Kuga 2012 or later  This is a compact SUV. At the 2011 Shanghai Motor Show, Ford announced its plan to produce it at the Chongqing plant.
Edge (Started importing and selling in December 2010) 2012 or later  This is a medium SUV (five-seater and AWD). This model will be equipped with a 3.5 L V6 engine (Ti-VCT) and six-speed AT. The MyFord Touch, an onboard multi-media system, will also be equipped. It will be imported and sold at a price range from 369.8K to 429.8K yuan (RMB).
New Escape 2013 or later  This is a medium SUV. Ford implied that production will be in China at the 2011 Shanghai Motor Show.
New Ka 2014 or later  This is a mini car. It is under development with Fiat. The sales price will be 80K yuan (RMB) or higher. It is equipped with the three-cylinder 1.0 L EcoBoost GTDi engine. The Fiat 500 platform is used. The fuel consumption is 4.7 L/100 km.
Electric
Vehicle
(HV/PHV/EV)
2014 or later  Ford will decide when to launch its electric vehicles, according to the demand trend in the Chinese market. All driving secondary batteries will be lithium-ion batteries, according to the announcement by Ford China.
First model under Changan Ford Automobile’s own brand (model release by 2014) 2015 or later  This will be the first model of the Changan Ford Automobile's own brand.

Jiangling Motors (Jiangling Motors Co., Ltd.)

Model Launch year Details
-2011 2012 2013 2014 2015
*JMC brand (independent development)
Yusheng
MT version
December
2010

 This is a diesel-engine model of the Yusheng MT version. It is equipped with the 2.4 L Topanther TDCi engine in compliance with the Euro 3/4 and 5MT. A frame structure body and the N350 platform are used. The price is ranged from 138.8K to 186.6K yuan (RMB).

  It is the second-generation high-end SUV. An Italian designer designed the body, and a Japanese designer designed the interior.
2011 or later  This will be a gasoline version of the Yusheng MT version.
Yusheng
AT version
2013 or later  This is an AT version of the Yusheng. It will be equipped with a 2.2 L Ford diesel engine “Puma”. It will use a frame structure body and the N350 platform. It will come with a GPS and sunroof. Bosch’s brake system will be used.
New
Pickup
2011 or later  This is a new pickup model (It will have single and double cab versions). The N350 platform is used. It is equipped with its proprietary engine “JX4D24” (model code).
New SUV N330 2012 or later  This is a new SUV. It is under development as of October 2011. It will use the N330 platform. In line with this development, Ford is developing a new gasoline engine to mount on this model and investing 125 million yuan (RMB).
Light truck N900 2012 or later  This is a new light truck. Its overall width is larger than the N800 light truck (maximum load is larger as well). It will use the new N900 platform.
Light truck N800
long-size version
2013 or later  This is a long wheel-base version of the N800 light truck. Its overall width is narrower than the N900 light truck (maximum load is smaller as well). It will use the new N800 platform.
Light truck N800 2014 or later  This is the standard size model of the long N800 light truck. Its overall width is narrower than the N900 light truck (maximum load is smaller as well). It will use the new N800 platform. 
*Ford brand
Maverick By the first half of 2013  This is the Ford brand SUV.
Fifth-generation Transit
Euro 5-
compatible version
June 2013 or later  This is the Euro 5-compatible version of the fifth-generation Transit. Ford plans to invest about 336.2 million yuan (RMB) in total in engineering development and production facilities (mold and tools).
New Transit
(Model code: V36x)
2015 or later  This is the Chinese version of the next-generation Transit.


(Reference)

Taiyuan Changan Ford Heavy Truck (tentative name), venture company to be established with Changan Automobile Group in Taiyuan, Shanxi province

Model Launch year Details
-2011 2012 2013 2014 2015

Third-generation

Ford Cargo
n.a.
(expected to be launched in 2012 or later)
 This is the Ford brand heavy-duty truck, and is the new Ford Cargo (third generation) presented by Ford Brazil in March 2011.
  The entry model of the new Ford Cargo will be equipped with Cummins’ 4/6 cylinder diesel engine and Eaton’s FS-series 6-speed or FST-series 13-speed MT. The price will range from 200K to 350K yuan (RMB) after it is locally manufactured.

Source: Press release of Ford Motor (China) (April 18/April 19/September 27/October 11, 2011) and Jiangling Motors (July 1, 2010), and various media reports.

 



Sales structure: Ford to increase Ford passenger car dealerships to 680 by end of 2015

 Plan to strengthen dealerships

・The passenger car sales channel of the Ford brand (Changan Ford Automobile's channel):
  350 dealerships at the end of 2010 → 450 at the end of 2011 → more than 680 at the end of 2015
・The light vehicle sales channel of the JMC brand and Ford brand (Jiangling Motors' channel):
  116 regional head dealerships in June 2011 → more than 600 dealerships, including sub-dealers, by the end of 2011

 

 Changan Ford Mazda Automobile: started operation of Zhengzhou Auto Parts Delivery Center in November 2010

 Changan Ford Mazda Automobile started operation of its Zhengzhou Auto Parts Delivery Center in Zhengzhou, Henan province in November 2010. This new center is the company’s fifth parts delivery center, following the existing Chongqing, Shanghai, Beijing, and Guangzhou centers. The building area is about 10,000 square meters, and it always has at least 10,000 parts ready.
 This new parts delivery center is mainly engaged in supplying service parts as well as improving the after-the-service quality in a total of seven provinces (Henan, Shandong, Hebei, Hubei, Anhui, Shanxi, and Shaanxi) which are located within a radius of 500 km from Zhengzhou city.
 Since this new center started operation, Changan Ford Mazda Automobile has been able to deliver products within one or two days for ordinary orders, and one day for urgent orders. The company has successfully shortened its delivery time by 50% or more than before. This center handles 3,000 or more orders per day as of November 2010.

Source: Press release of Ford Motor (China) (November 1, 2010), etc.

Jiangling Motors exports CKD parts for Transit to Ford's Vietnamese joint venture plant

 Jiangling Motors and Ford's Vietnamese joint venture plant (Ford Vietnam Ltd. in Hai Duong province), in which Ford has a 75% stake, signed the exclusive supply agreement of CKD parts for the fifth-generation Transit in 2010. Since the first half of 2011, Jiangling Motors has exported CKD parts for the Transit light van. They expect to have an annual trade of 150 million yuan (RMB).

Source: Jiangling Motors’ annual report (2010), press release (April 10 and December 17, 2010), etc.

 


(Reference)

Sales volume of passenger and light commercial vehicles of Ford's Chinese joint venture companies by model (unit)

Joint
company
Model
2007
2008
2009
2010
January
-August
2010
January
-August
2011
2011
(planning)
Changan
Ford Mazda Automobile
 
Mondeo 2.5
3,237
12
-
-
-
-
 
Over 310K
total units of
Ford/Volvo brands
Mondeo Zhisheng 2.0
26,290
1
1,466
1,110
672
20,179
Mondeo Zhisheng 2.3
14,848
39,608
42,936
50,476
32,676
16,355
Focus 2box 1.8
124,991
50,039
60,980
84,408
51,687
66,576
Focus 2box 2.0
5,733
4,575
4,202
3,269
1,105
Focus 3box 1.8
55,386
67,847
82,993
52,218
57,212
Focus 3box 2.0
1,394
958
667
405
316
Fiesta 2box 1.3
-
-
4,177
1,870
1,386
770
Fiesta 2box 1.5
-
-
29,240
50,417
31,488
28,529
Fiesta 3box 1.3
-
-
0
4,559
2,737
2,786
Fiesta 3box 1.5
-
-
13,962
18,353
11,934
9,467
S-MAX
4,719
3,918
4,600
5,049
3,463
2,559
Volvo S40 2.0
6,391
0
5,148
5,332
3,198
3,296
Volvo S40 2.4
5,093
845
146
145
0
Volvo S40 2.5
573
150
59
42
0
Volvo S80 2.0
-
-
0
299
0
6,137
Volvo S80 2.5
-
-
6,936
10,546
6,577
2
Volvo S80 3.0
-
-
1,417
709
450
141
Mazda 3 1.6
35,844
24,112
43,576
64,336
32,231
42,391
 
Over 110K
total units of
Mazda brand
Mazda 3 2.0
5,113
4,652
4,281
2,836
1,914
Mazda 2 2box 1.3
1,528
5,540
3,523
2,120
1,587
756
Mazda 2 2box 1.5
1,647
7,288
8,331
6,404
3,016
Mazda 2 3box 1.3
3,253
3,288
1,883
1,609
259
Mazda 2 3box 1.5
3,252
8,575
9,347
7,735
2,722
Total
217,848
204,674
316,139
411,493
254,749
266,488
Over
420,000
Jiangling Motors
 
Ford brand light vans
(The third & fifth
generation Transit)
26,585
27,472
33,585
52,358
33,920
38,912
 
Over 200K total units of Ford light vans and JMC own brand
JMC trucks
38,829
38,290
46,252
66,224
44,730
48,256
JMC SUVs & pickups
28,804
28,838
34,851
60,417
38,407
46,642
JMC light bus (Yunba)
841
571
-
-
-
-
Total
95,059
95,171
114,688
178,999
117,057
133,810
Over
200,000
Grand total
312,907
299,845
430,827
590,492
371,806
400,298
Over
620,000
 
Ford brand vehicles
200,670
183,563
264,326
356,462
225,855
244,766
Over
510,000
 
cars
174,085
156,091
230,741
304,104
191,935
205,854
commercial vehicle
(Transit only now)
26,585
27,472
33,585
52,358
33,920
38,912
Volvo brand cars
6,391
5,666
14,496
17,091
10,412
9,576
JMC brand vehicles
68,474
67,699
81,103
126,641
83,137
94,898
Mazda brand cars
37,372
42,917
70,902
90,298
52,402
51,058
Over
110,000
 Taiyuan Changan Heavy Truck
(Reference)
  Trailers & dump trucks (medium- & heavy-duty commercial vehicles)
11
27
1,618
2,967
2,091
2,358
 
Semi-trailers (gross weight of 25 tons or lighter)
0
0
0
46
24
53
Total
11
27
1,618
3,013
2,115
2,411

Note 1: On October 11, 2011, Ford announced that its accumulated sales record in the January-September period of 2011 in China accounted for 60% of the Asia-Pacific-African region (APA)
Note 2: The consignment production agreements for the Volvo S40 and S80L (longer than the S80 in size) between Changan Ford-Mazda and Volvo Car will expire in 2016 and 2018 respectively.

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