By Jay Ramey, Crain News Service
DETROIT (July 3, 2014) — If anyone needed another reminder of why China is now the No. 1 automotive consumer market, here’s the latest bit of proof: Ford opened up 88 dealerships in China June 19.
No, that’s not the number of dealerships opened up since the start of the year. That’s 88 dealerships opened in just one day, to be exact. And Automotive News, a sister publication of Tire Business, reported that Ford now has a total of 750 dealerships in the country.
The local joint venture, Changan Ford Automobile Co., has focused on opening dealerships in the so-called Tier 4 cities, gaining a foothold in rapidly growing provincial towns instead of taking dozens of other auto makers head-on in much larger cities. But these Tier 4 cities still boast populations numbering in the millions, and a lot of Ford’s potential customers in China are first-time vehicle buyers. Ford CEO Alan Mulally attended the opening of one of the 88 dealerships last week, the Shanghai Jiuhua West located on the outskirts of one of China’s largest cities.
“With the growth momentum we have going right now, we expect to exceed 800 dealer points in China by the end of 2014,” Marin Burela, president and CEO of Changan Ford, told Automotive News.
Ford has been forced to play catch-up with General Motors Co., which started investing in China in the 1990s with the formation of Shanghai GM, and years later it still has a runaway hit on its hands in the form of the Buick brand. Ford has been a bit slower to expand into China with its own joint venture, though it seems to have a lot of the right ingredients for success.
A couple of those ingredients are a dealer network targeting up-and-coming regional centers overlooked by other major players in the country and vehicles designed to appeal to first-time buyers.
Ford’s China sales have risen by 39 percent to 461,473 vehicles in the first five months of this year, and with the debut of the 2015 Ford Escort designed exclusively for the Chinese market, Changan Ford will be on track to make up the ground lost to western brands with a longer presence in the market.
This report appeared on the website of Autoweek magazine, a Detroit-based sister publication of Tire Business.
With the threat of more tariffs looming, how concerned are you about a trade war?
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