Saturday, January 18, 2003
Ford launches first locally made car in China
REUTERS
CHONGQING: Ford Motor its opening salvo at China's competitive but fast-growing auto market on Saturday, launching its Fiesta compact and saying it expected to sell 20,000 of the cars this year.
Sales of the Fiesta -- the first car Ford is producing in China and unveiled in an explosion of fireworks and flamenco dancers in the southwestern city of Chongqing -- should rise to 50,000 next year, executive vice president David Thursfield told Reuters.
The Fiesta, whose name means "festival" in Spanish, zeroes in on the top-selling models of Ford's major rivals, such as General Motors and Germany's Volkswagen , which Ford has lagged in China.
Both GM and Volkswagen started rolling out cars here years ago and sell a range of models. Thursfield said Ford had to push out more products to win a slice of the fastest-growing car market in the world.
"We are conscious of that and we can use our global resources and brands to satisfy the Chinese customer," said Thursfield, the number three man at the world's second largest automaker.
"Next year we will be looking at 50,000, fulfilling the current capacity, before taking further steps to increase the capacity," he told Reuters Television before the launch.
The Fiesta takes Ford's long-standing war against GM to China, where booming economic growth accelerated car sales by 56 per cent to 1.126 million units in 2002.
GM trimmed prices of its best-selling Chinese car by three per cent days before the Fiesta's unveiling, to 89,900 to 129,800 yuan ($10,860-15,680). The Fiesta's tag is 88,800 to 127,800 yuan.
Ford enters a family car segment already crowded by GM, Volkswagen, Toyota Motor, Fiat and others.
Thursfield said Ford would be careful in expanding its $98 million plant, a caution shared by its 50-50 Chinese partner Chongqing Changan Automobile.
"Last year saw record growth that cannot be sustained," Yin Jiaxu, president of Chongqing Changan, told reporters outside the plant. But he also said growth would be strong over the next 10 years.
Ford is one of the most prominent foreign investors to jump on the country's push to develop its vast western hinterlands.
In a show of support, Chinese parliamentary chief Li Peng visited the plant before the launch and his signature was scrawled on the hood of the first Fiesta to roll off the assembly line, a bright gold sedan.
Thursfield said ChanganFord Automobile Corp's annual capacity of 50,000 cars may rise to 150,000 as early as 2004.
Ford and GM have been fighting it out in their home market in 2002, matching each other's cash rebates and other incentives.
But GM appeared to have the upper hand in China with stakes in four plants. Ford owns a stake in just one other, light truck and minivan maker Jiangling Motors, and its Chongqing plant is much smaller than GM's $1.5 billion Shanghai plant that can churn out 100,000 cars a year.
Still, Thursfield has high hopes for a vehicle market he sees becoming the world's second largest in three to four years.
He also said he was "fairly confident" of hitting Ford's profit target of 70 cents per share in 2003. He expected international operations to turn a profit in 2003, though the North American market could cool this year.
"My objective is to have profitable business units throughout the globe outside of North America. It's my intention that each one of those will contribute," he said.
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