Ford to expand China sales effort
The automaker plans 66 dealerships in emerging cities.
By Eric Rosenbaum, TheStreet
Ford (F) plans to add 66 dealerships in China before the end of the year, according to a Ford document reviewed by The Wall Street Journal. The 25% expansion of Ford's China sales effort will focus on what are considered the tier-two and tier-three cities in western and northern China.
In all, Ford will have added approximately 100 dealerships in China with its partner, Changan Automobile, by the end of the year. The total number of Ford dealerships in China will be roughly 340 by year's end, according to the Ford statement reviewed by the Journal.
The tier-two and tier-three cities in China include Nanning, Shijazhuang, Harbin and Anyang, cities with populations of more than 1 million. Car demand isn't the only consumer trend being tapped in the Chinese tier-two and tier-three cities. It's part of a much larger trend in China, including education, health care and real estate, as the tier-one cities become saturated.
In some cases, such as real estate, the tier-one cities have become overheated, and businesses are looking to exploit the tier-two and tier three-cities as a way to sustain growth.
Consumer spending is also on the rise across China after the government launched an ambitious health insurance plan this year. In the past, Chinese consumers have been less lax with their wallets because of the need to save for health expenses.
In an interview with the Journal, Joe Hinrichs, the head of Ford's Asian-Pacific and Africa operations and the chief executive of Ford China, said that these cities should grow steadily over the next few years as consumers spend more. "So getting dealers in those locations, and ultimately bring(ing) out products that are attractive and interesting to those markets, is a key part of our strategy moving forward," Hinrichs said.
Ford will also launch four new models in China, including the the Ford Edge crossover next month. Ford's weakness in the tier-two and tier-three cities is a lack of economy-priced vehicles, which the company plans to remedy in the coming years, Hinrichs said.
Ford expects sales of vehicles in China to reach 18 million this year, up from fewer than 13.5 million in 2009, and hit a growth rate of 10% next year, according to the Journal.
Related Articles
MORE ON MSN MONEY
DATA PROVIDERS
Copyright © 2013 Microsoft. All rights reserved.
Quotes are real-time for NASDAQ, NYSE and AMEX. See delay times for other exchanges.
Fundamental company data and historical chart data provided by Thomson Reuters (click for restrictions). Real-time quotes provided by BATS Exchange. Real-time index quotes and delayed quotes supplied by Interactive Data Real-Time Services. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by SIX Financial Information.
Japanese stock price data provided by Nomura Research Institute Ltd.; quotes delayed 20 minutes. Canadian fund data provided by CANNEX Financial Exchanges Ltd.
LATEST POSTS
In the never-ending contest for sales, American carmakers are pulling ahead.
FIDELITY VIEWPOINTS
- How to sell covered calls - Fidelity Investments
- Savvy year-end tax moves to consider now - Fidelity Investments
- Seven ways to prepare for tax changes
- Five reasons an annual review is crucial - Fidelity Investments
- Take a look at mid caps now - Fidelity Investments
- State of the sector: Health care - Fidelity Investments
VIDEO ON MSN MONEY
ABOUT
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.
