New Product Portfolio to Boost Ford Sales in China, Asia-Pacific Chief Says

DETROIT – Ford plans an onslaught of new products in China this year to increase sales and boost share in a market that it predicts will hit 30 million units annually by 2020.

David Schoch, who late last year took over management of Ford’s Asia-Pacific Africa divisionfrom Joe Hinrichs, says the auto maker is constructing five new plants in China – three for vehicle assembly and two dedicated to powertrains that will allow it to boost capacity.

Ford launched production of the Focus C-car at its Chongqing No.2 plant in early 2012, and Schoch says the model has been a runaway success. “That vehicle has done very well for us,” he tells WardsAuto in an interview here. “It’s been the leading sales nameplate in the past four months in China.”

Joining the Focus this year will be the EcoSport and Kuga cross/utility vehicles, as well as the performance-oriented Focus ST and new Explorer SUV. A refreshed Fiesta B-car and Mondeo midsize sedan arrive in 2014, to be assembled in Chongqing.

Schoch has high hopes for all the new products but is especially bullish on the soon-to-be-introduced utility vehicles.

“The fastest-growing (segments are utilities) and premium vehicles, and we’ve announced Lincoln is coming in by the middle of next year,” he says. In addition to the EcoSport and Kuga, “we’re bringing in the Edge and Explorer. So the full family of our strongest products we will have in China.”

Schoch says the new models should help boost Ford’s current 2.8% share but declines to reveal internal targets. “We believe we will get a big bounce this year.”

Schoch agrees with reports the Chinese market is slowing, but says the pace of growth still is greater than in other countries.

Over the past several years, China’s gross domestic product has climbed a tepid 10%-11%, which Schoch says is not sustainable. Ford forecasts the annual GDP to grow just 5%-10% over the next decade.

“Yes, it’s slowed down, but you have to keep it in perspective,” he says, noting most other countries would “give anything” for China’s projected growth.

Schoch says last year’s dissolution of a joint venture with Mazda and the local Changan Group will help Ford in the long run. With Mazda out, Ford now controls a 50% stake and having one less partner will help streamline operations. Prior to that, it held a 35% stake in the JV, while Mazda controlled 15% and Changan 50%.

“Managing a JV is hard, and when you have three partners it’s even harder,” he says. “So cutting it back to two and concentrating on one partner is the way we have to go.”

In addition to overseeing a slew of new product launches, Schoch is preparing for the arrival of the Lincoln luxury brand in China next year.

Lincoln will be entering a segment dominated by Audi, Mercedes-Benz and BMW, and Schoch admits it be tough going head-to-head with such well-established German competitors.

Recent workshops indicate Chinese consumers are aware of the Lincoln marque but view it as a presidential brand because of the name and the fact many past U.S. presidents have ridden in Lincoln limousines.

“We’re trying to change that image,” Schoch says, pointing to the Lincoln MKC concept that bowed at the recent North American International Auto Show here. “We really want to grab the younger, affluent Chinese, the late-30-year-olds that have made a lot of money.”

Ford is accepting applications for dealers in China to set up a Lincoln network. Initially, most showrooms will be located on the country’s more-affluent east coast, with other regions to be added later.

“We have a clean piece of paper on how we structure our dealers and the level of customer-service satisfaction,” Schoch says. “So this is a great opportunity for us to build off of what North America is doing and bring it into China.”

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