NEW YORK (
is planning to add 66 dealerships in China before the end of the year, according to a Ford document reviewed by
The Wall Street Journal
. The one-fourth expansion of Ford's China sales effort will focus on what are considered the tier-two and tier-three cities in Western and Northern China.
In all, Ford will have added approximately 100 new dealerships in China with its partner, Changan Automobile, by the end of the year. The total number of Ford dealerships in China will be roughly 340 by year-end, according to the Ford statement reviewed by the
The tier-two and tier-three cities in China include Nanning, Shijazhuang, Harbin and Anyang, cities with populations over one million. Car demand isn't the only consumer trend being tapped in the Chinese tier two and tier three cities. It's part of a much larger trend in China, from education to health care and real estate, as the tier one cities become saturated.
In some cases, such as real estate, the tier-one cities have become overheated, and businesses are looking to exploit the tier-two and tier three-cities as a way to sustain growth.
Consumer spending is also on the rise across China after the national government launched an ambitious health insurance plan this year. In the past, Chinese consumers have been less lax with their wallets due to the need to save for health expenses.
In an interview with the
, Joe Hinrichs, head of Ford's Asian-Pacific and Africa operations and chief executive of Ford China, said that these cities should grow steadily over the next few years as consumers spend more. "So getting dealers in those locations, and ultimately bring
ing out products that are attractive and interesting to those markets, is a key part of our strategy moving forward," the Ford executive told the
Ford will be launching four new models in China too, including the introduction of the Ford Edge crossover vehicle next month. Ford's weakness in the tier two and tier three cities is a lack of economy-priced vehicles, which the American auto company plans to remedy in the coming years, the Ford executive told the
Ford expects sales of vehicles in China to reach 18 million this year, from less than 13.5 million in 2009, and hit a growth rate of 10% next year, according to the
-- Written by Eric Rosenbaum from New York.
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