Ford Motor Company Gains on GM in China

The Blue Oval's sales streak continues, thanks to some familiar models.

Jun 10, 2014 at 1:33PM

Focus

Ford builds the "regular" Focus in China, but the hot Focus ST is imported from the U.S. The Focus is one of China's best-selling cars. Source: Ford Motor Company

Ford (NYSE:F) said that its sales in China were once again up big in May.

Ford posted a 32% year-over-year sales increase in China for the month. For the year to date, Ford's sales are up 39%.

Month after month, we've seen Ford post big sales gains that far outpace the overall Chinese new-vehicle market. Ford's expansion plan for China is an aggressive one, but the company might well be running ahead of its own ambitious sales targets. And while giant General Motors (NYSE:GM) still outsells Ford by a wide margin in China, Ford has been gaining ground steadily -- month after month.

But it's not a surprise when you look at what's really happening. As Motley Fool senior auto specialist John Rosevear explains in this video, the Fords that are getting such interest from Chinese consumers are the same models that are Ford's mainstay cars here in the U.S. and in Europe. 

A transcript of the video is below.

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John Rosevear: Hey Fools, it's John Rosevear, senior auto specialist for Fool.com. Ford said the other day that its run of sales success in China continued last month. Ford's sales in China were up 32% in May, for the year to date they're up 39%. That comes on top of a gain of about 50% last year, and it's a streak that shows no signs of ending.

Ford's aggressive expansion plan for China is on track, it might even be a little ahead of the company's own expectations.

Let's put some context around this. Ford sold -- and these are wholesale sales, deliveries to Ford dealers in China, not retail sales -- but on a wholesale basis, Ford sold 93,323 vehicles in China last month.

That's still a long way behind General Motors and Volkswagen, GM and its various joint ventures sold about three times as many vehicles in China last month as Ford did, but it's still a pretty big number, and the big year-over-year percentage increases that we're hearing month after month mean that Ford is closing the gap I think faster than most observers expected.

And the great thing is that they're doing it with the same cars that are driving a lot of Ford's success in other parts of the world. The Focus continues to be Ford's best-seller in China, in fact it's consistently one of the best-selling cars in China, sales were up big again in May, a 22% increase to just over 33,000 Focuses sold.

And the Mondeo is also gaining ground, the Mondeo is the Chinese-market version of Ford's Fusion, it's the same car, you'd recognize it instantly, but they call it the Mondeo because they use the European-market names for their models in China. Ford has long sold midsize sedans under the Mondeo name in Europe, in fact Europe is getting an all-new Mondeo shortly and that also looks just like a Ford Fusion.

Sales of the Mondeo in China aren't quite equal to sales of the Fusion here in the U.S. yet, but they've been pretty good, Ford shipped 10,395 Mondeos in China last month.

Ford's also doing well in China with commercial vehicles, just as it does in Europe and here in the U.S., trucks and commercial vans based. Ford has a separate joint venture for commercial vehicles, and sales there were up 25% in May, they sold a little over 21,000 vehicles last month, a solid total.

Long story short, Ford's very good growth story in China is continuing to play out, and Ford is evolving into a major player in China's huge new-vehicle market, it's now the biggest new-car market in the world, and it should be a source of big profits for Ford over the next few years. Thanks for watching.

John Rosevear owns shares of Ford and General Motors. The Motley Fool recommends Ford and General Motors. The Motley Fool owns shares of Ford. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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