The Ford Focus Continues to Be a Superstar in Chinahttp://www.fool.com/investing/general/2014/03/06/the-ford-focus-continues-to-be-a-superstar-in-chin.aspx John Rosevear
March 6, 2014
Ford (NYSE: F) said on Thursday that its sales in China were up a whopping 67% in February, the latest in a long string of huge year-over-year sales gains for Ford in the world's largest auto market.
Ford has been investing heavily in an aggressive growth plan in China. But, if anything, its sales growth has outpaced its own optimistic expectations.
Profits from the region have been limited by Ford's heavy spending on new factories and other facilities, but booming sales suggest that those investments will be well-rewarded before long.
The Focus continues to lead Ford's China boom
The New Focus is positioned at the upper end of China's compact-car market, sold as a premium model. That's in keeping with Ford's strategy in other parts of the world, and other new Fords are being positioned along similar lines. The latest of those is the Mondeo, a midsize sedan that will look very familiar to American eyes: It's the Chinese version of the Fusion.
It replaced an older model that originated in Europe, also called "Mondeo," last summer. And as with its American sibling, sales have been strong: Mondeo sales in China were up 123% in February.
So far this year, Ford's sales in China are up 59%. That trend should continue: Ford China chief John Lawler said last month that he expects Ford's sales growth to outpace the growth of the overall Chinese auto market this year. He also said that Ford should sell more than 1 million vehicles in China in 2014.
Clearly, Ford's big investments in China are looking like good bets. That may be why another significant Ford investment in China came to light this past week.
A big boost for Ford's China R&D center
A Ford spokesperson confirmed to me that the company is investing about $100 million in its Research and Engineering Center in the eastern Chinese city of Nanjing. The site employs about 1,300 people now, and Ford expects to increase that to about 2,000 by 2018. That will involve some expansion -- a new building is on the way, as is an all-new test track, Ford says.
What's this all about? It seems clear that Ford wants to do more product development work right in China. That is likely to be a competitive advantage: Local Chinese R&D teams will know best what modifications are needed to customize Ford's global models to Chinese consumers' tastes. In time, this center could also contribute to -- or even lead -- development of new globa