Asian Revival: Ford's Asia Strategy Yields Record Results In September
Despite persistent challenges in North American and European auto markets, Ford's Asia Pacific and Africa division has achieved record resultsÂ in September. These resultsÂ are primarily attributed toÂ its aggressive focus on small cars; a strategy, that continues to increaseÂ unit sales and brand loyalty.Â Moreover, FordÂ continues to make sound strategic investments in its supply chain; investments, that are both increasing localÂ production participationÂ while also reducing manufacturing costs through enhanced economies of scale. For example, Ford'sÂ decision to produce the "Fiesta" at its sharedÂ AutoAlliance plantÂ in Thailand (shared with Mazda), has enabled Ford to triple its sales within Thailand. Moverover, with a new fully owned plant based in Thailand due to come onstream in 2012, Ford furtherÂ expects thatÂ its growth withinÂ South Asian markets, asÂ well as its share of regional exports, will continue to rise. Overall,Â a review of Ford's September financial & operations dataÂ revealsÂ that Ford's combined sales inÂ China and India, reached 482,129 units for the nine months to September, up 50% year-on-year. Indian sales were also boosted because of the small car programme.Â In fact, Ford's flagship Indian model,Â the Figo, is expected to soon reach outputs ofÂ 50,000 units.Â This output, combined with strong sales, enabledÂ Ford grow its sales within India by 146% in September, while realizingÂ 188% combined growthÂ over the first 3Â quarters of this fiscal year. Â
While Indian and South Asian markets continue to perform, growth within China remains positive, but modest.Â Sales within the chinese market were up 26% in September and 40% for the nine month year to date period. While the rate of growth is less than select South Asian markets, analysts expect that this growth rate will continue to rise, particularly as Ford ads engine production capacity through its joint venture with Changan Ford Mazda Automotive. Chinese sales growth will also be enhancedÂ by Ford's expansionÂ into theÂ commercial vehicle market. This expansion will be aided by the construction of a new plant in China that Ford will be operating withÂ Jiangling Motors Corp (JAC).Â Once theÂ US$300 millionÂ plant is operational, it is expected that bothÂ Ford and JAC vehicles will realize significant sales increases within China.Â Moreover, with China's infrastructure stimulus plan continually generating growthÂ inÂ related industries, including the construction sector,Â it is reasonable to expect that the demand for Ford's commercialÂ vehicles will alsoÂ increase proportionally. Overall, Ford believes thatÂ approximately 70% ofÂ its global growth (over the next decade) will come from its Asia Pacific and Africa regions. This September, Ford Asia's cumulative divisionÂ sales of 78,700 units were up 27% year over year, andÂ andÂ sales of 651,856 units within Asia over the last 9 months represent aÂ 40% year over year gain.Â This growth significantly exceeds the modest growth of 21% year of year that Ford has realized in the United States for the last 9 months, and contrasts against the 5% decrease in European unit sales that Ford has realizedÂ over the last 8 months. On the whole, Ford's performance is very much inline with the results seen by other automakers, with emerging markets continuallyÂ driving significantly higher portions of global sales.