Ford's Aggressive Expansion Plans Doable, Exec Says

FORD'S TOP ASIA/PACIFIC EXECUTIVE scoffs at criticism that the auto maker's ambitious growth plans for the region are unrealistic.

“A lot of people said they're too aggressive,” Joe Hinrichs, president of Ford Asia Pacific and Africa and chairman and CEO of Ford China, tells journalists. “But the plan is doable.”

The auto maker in May unveiled its plan to boost worldwide sales 50% by mid-decade to 8 million units, with much of the increase coming in the Asia/Pacific region.

Pundits quickly noted other auto makers have similar aspirations and claimed demand, even in huge growth markets like China, will not support such expansion.

Hinrichs says Ford's plan was carefully considered and most of the auto maker's growth will come from segments where it does not currently compete.

In some cases, segments clearly defined in mature markets such as the U.S. are fragmented in developing areas. For example, the C-segment in China comprises C-high, C-mid, and C-low.

“The Focus plays in and has double-digit market share in C-high,” he says. “But we don't play in C-mid and C-low.”

By mid-decade, Ford India will increase its product offerings to eight from three, Hinrichs says. Within the same timeline, the China lineup will be expanded to 15 from five, and 90%-95% of the vehicles will be based on global platforms.

The new products will be less-expensive, he says, noting 30% of the market in China is controlled by vehicles costing $14,500 or less. In India, vehicles that sticker for less than $8,500 are dominant.

Hinrichs is tightlipped on product-introduction plans and evasive when asked if Ford will launch region-specific nameplates. “We are very consistent with our global plan on having global names, such as Fiesta, Focus, Kuga, Mondeo,” he says.

When the plan was unveiled originally, Chief Financial Officer Lewis Booth said Ford's strategy was “fueled in part by de-contented versions of global vehicles.”

The India-produced Figo laid the foundation for this strategy. Unveiled last year, the subcompact car was an instant success, tripling Ford's overall sales in the market.

Hinrichs says these lessons will be applied to all upcoming global products.