How Ford Wants Nothing, and Everything, to Do With China -- and It's Working
While Ford would prefer Chinese competition stay overseas, there's no question that two of its biggest strategies are tying it even closer to China. The good news is it's working well.
Overview
"I think you have to see the [Detroit Three] exit China as soon as they possibly can," said Bank of America securities analyst John Murphy, at his annual presentation of "Car Wars," a closely watched industry report.
That warning was sent just over two years ago as analysts saw what was coming: intense competition in China's domestic market. The brutal price war, long list of competitors, rapid electric vehicle (EV) technology development, and other things have all made life for foreign automakers extremely difficult in China. Furthermore, competitors Ford Motor Company (NYSE: F) and crosstown rival General Motors (NYSE: GM) want nothing to do with having Chinese automakers invade their U.S. profit engine. With Ford stuck in between a rock and a hard place with the Chinese, the company has made two massive moves to evolve its business -- and it's working well.
Details
Rather than exit the market entirely, Ford opted for a strategy that has quickly caught on: Use Chinese operations as an export hub. Ford decided to scale down investments in local sales and has, at least for now, repurposed its joint ventures, Changan Automobile and Jiangling Motors, to export its vehicles globally. Made-in-China vehicles such as the Equator Sport crossover, Mondeo sedan, Lincoln Nautilus SUV, and electric commercial vans make their way to Southeast Asia, the Middle East, South America, and the big one, Europe.
Source
Originally published at www.fool.com.