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TheStreet Open House

How Far Can Ford Go in China?

For the first eight months, Volkswagen has a 15% market share in China, according to J.D. Power, while Hyundai had 8%, GM (GM) 7%, Toyota and Renault-Nissan each had 4%, while Ford and Honda each had 3%. Some tabulations credit GM with a higher share on the basis of a joint venture in which GM holds substantially less than the 50% that is typical for foreign companies in China.

Ford began producing cars in its joint venture in 2003, four years after GM and 18 years after Volkswagen. Because GM and Volkswagen arrived earlier, they signed partnerships with companies based in Shanghai and Beijing, which seemed more desirable at the time.

"In the late 1990s the Chinese government held a competition to partner with Shanghai Automotive to be the national luxury carmaker," Dunne said. "The competition got down to GM and Ford, and GM won by offering a Buick product. That was a big coup for GM, as a launching pad into China."

Ford's sales in China totaled 647,849 units in the first three quarters, up 51% from the same period a year earlier. Ford has committed to spend $5 billion to build five new plants in China, bringing its total to nine by 2015.

Ford posted a pretax profit of $183 million in Asia in the first half of 2013, a swing from a year-earlier loss of $161 million. Ford Asia chief David Schoch said last week that he expects the region to be profitable in 2013 and to be "a major contributor" to Ford profit by mid-decade.

-- Written by Ted Reed in Charlotte, N.C.

>To contact the writer of this article, click here: Ted Reed

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