Ford CEO sees leaner, lower investment in China’s auto market
FORD Motor is hitting the brakes in China, the world’s largest auto market, with new plans to scale back investment in order to improve profitability.
“Our strategy going forward in China will change,” chief executive officer Jim Farley told analysts on Tuesday in a call on Ford’s surprisingly strong first quarter results. “We’re going to go to a much lower investment, leaner, more focused business in China with higher returns.”
Ford has struggled to gain traction in China, where it had market share last year of 2.1 per cent and losses of US$572 million before interest and taxes. Farley said he took his management team to China last month to “finalise our strategy.”
The new plan includes increasing focus on commercial vehicles, a business that is profitable in China for Ford, according to Farley. The automaker also plans to use its Chinese factories as an “export hub for affordable EVs” and gasoline-fuelled commercial vehicles.
Ford last month revealed that it would begin exporting Lincoln Nautilus sport-utility vehicles from its plant in Hangzhou, China, to the US, a first for the company. It’s also building a battery factory in Michigan that will license technology from China’s Contemporary Amperex Technology.
By zeroing in on commercial vehicles, exports and its Lincoln luxury line in China, Farley contends Ford can earn a better return on its investment there.
It will be “a much more focused business in China,” Farley said. “From now on, we’re not going to try to serve everyone. BLOOMBERG
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