This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

How Far Can Ford Go in China?

Stocks in this article: F

SHANGHAI ( TheStreet) -- Ford (F) got into China late and seemed to stake out wrong regions of the sprawling country, locating far from the surging coastal economies of Beijing and Shanghai.

But now the automaker is benefitting from rapid growth in lower central China, where Ford has a joint venture with Chongqing Changan Automobile. The business is based in Chongqing, a large city that borders Sichuan province. Together, Chongqing and Sichuan have about 110 million people, more than any Chinese province.

Ford said last week that it expects to increase its fourth-quarter market share in China to 5%, double its level at the end of 2011. The company has said it expects to have a 6% share by 2015.

"There's been a lot of investment from the central government into the inland regions, in terms of infrastructure investment and power generation," said Tim Dunne, director of global automotive operations for J.D. Power and Associates. "That helps Ford's growth. Ford is well-positioned, close to where the new buyers are coming from."

Dunne said Ford's expectation for 5% growth is realistic, but he cautioned that looking ahead Ford may not be able to grow so quickly. At 2.5%, he said, Ford "was lagging behind where they should have been.

"But now, as a global brand, they are close to where they should be and, as in any endeavor, the further you go, the more difficult the incremental increases become," he said.

Ford is benefitting this year from fallbacks by Japanese automakers, perhaps as a result of recent flare-ups in a territorial dispute between China and Japan. During the first eight months of 2013, according to J.D. Power, Nissan (NSANY) China passenger vehicle sales fell 17%, Toyota (TM) sales fell 8% and Honda (HMC) sales fell 3%, according to J.D. Power figures. During the same period, Ford passenger vehicle sales rose 73%.

It would be unwise to assume the Japanese will not recover as nationalist hostility diminishes, Dunne said. "Chinese buyers are shrewd," he said. "They will look carefully at what is the best investment for them personally."

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,778.15 +421.28 2.43%
S&P 500 2,061.23 +48.34 2.40%
NASDAQ 4,748.3960 +104.0840 2.24%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs