Ford Motor Co is making major investments in hot overseas markets after years of painful restructuring transformed the second-largest US automaker into a leaner, more focused company.
“Ford is smart,” said James Bell, a senior analyst with Kelley Blue Book, which tracks data from across the auto industry. “They’ve put their house in order in North America and now they’re taking their money and putting some of it onto growth markets. The US is good market. but it isn’t a growth market.”
Ford has so far trailed key rivals General Motors and Volkswagen in boosting its presence in emerging markets, said Rebecca Lindland, an analyst with HIS Global Insight.
PHOTO: EPA
“If you’re going to be a player in the global landscape in five years, you have to play in places such as Brazil, Russia, India and China,” she said.
Ford CEO Alan Mulally recently toured South America, where he announced plans to increase investments in Brazil from US$2.2 billion to US$2.4 billion from next year to 2015.
The investment marks the largest single amount Ford has invested in its Brazilian operations during a five-year window in its 90-year history in the country.
“Developing truly global vehicles and platforms is a key part of our ONE Ford plan,” Mulally said. “Ultimately, our goal is to offer customers in every part of the world a full family of exciting Ford vehicles.”
The automaker announced plans earlier this month to add a second shift at its new plant in Chennai, India, which opened in February. The all-new Ford Figo has received more than 10,000 orders in less than one month after it went on sale, a Ford India record, and helped Ford India triple its sales last month.
Last fall, Ford announced that its joint venture in China — Chang-an Ford Mazda Automobile (長安福特馬自達汽車) — was building a new, state-of-the-art and highly flexible passenger car plant in Chongqing, China.
The investment, valued at US$490 million, represents a significant step in Ford’s aggressive expansion strategy in the Asia Pacific and Africa region. The new plant initially will be capable of producing 150,000 units a year, boosting total annual production capacity at the Chinese plant to 600,000 units by 2012.
Ford is also employing different product development strategies as it pursues overseas sales, such as designing a new heavy duty pickup truck specifically for export to the Middle East.
“In the past, we didn’t always think about exports. Now we do,” Chris Brewer, the chief engineer of the 2011 F-Series Super Duty truck, said in a recent press briefing.
“We’ve had great success in the Middle East with our trucks where they’re used for construction, in the oil field and by the security services,” said Mike Crowley, director of sales for Ford export operations, adding that Ford exported more than 7,000 heavy duty pickup trucks to the Middle East last year.
Ford is confident it can grow sales in the region, where the Crown Victoria sedan, Ford Taurus and several sport utility vehicles are also selling well, Crowley said.
“It depends on the exchange rate somewhat, but the Middle East and Africa is shaping up to be pretty important markets for us,” Crowley said.
Meanwhile, Ford’s comeback also continues to impress observers after it posted a US$2.7 billion profit last year — its first annual profit since 2005 — despite a turbulent year that led to the bankruptcies of its Detroit rivals.
“Ford clearly has a much more robust and competitive business model that is capable of supporting significant improvement in performance over time,” Moody Investor Services senior vice president Bruce Clark said when the agency recently raised the rating on Ford’s outstanding debt.
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