Copyright FOURIN, Inc. 2022
Ford Motor Launches China-only Models, Localizes Lincoln Brand to Turn Around Sales in China
Ford Motor’s sales in China declined 38.5% year-on-year to 236,000 units in 2019. In addition to the Sino-US trade friction, Ford’s product strategy of introducing its global products in the Chinese market which has very different needs resulted in a significant drop in sales. Due to the new coronavirus, sales continued to decline in 2020 as well, going down 28% to 35,000 units in the first three months of the year. Ford aims to recover its business in China with a two-pillar strategy of launching vehicles with specifications tailored to the Chinese market and locally producing the Lincoln brand.
Ford revealed in its “China 2.0 Strategy,” announced in April 2019, that the automaker plans to restructure its business in China by strengthening its response to the needs of the Chinese market. Since then, Ford has been focusing on launching vehicles with China-only specifications. The Escape, which was released in December 2019, has a different front grille design than the US version. Despite being a 4WD model equipped with a 2.0L turbocharged engine, the selling price was kept at around 200,000 RMB. The Explorer, which is scheduled to be launched in June 2020, also has a revamped exterior including the front grille. In addition, the Puma, a small SUV, is expected to be launched by the end of 2020. It is highly likely that this model will also have an original design that meets the needs of the Chinese market.
In addition, regarding the Lincoln brand which is handled by Changan Ford in China, the brand’s first locally-made model, the Corsair, was released in March 2020. The selling price ranges between 246,800–345,800 CNY, which is below that of rival models such as the Cadillac XT4 or the Volvo XC40. Changan Ford plans to expand the product lineup of the locally-made Lincoln brand. The next locally-made model, the Aviator, is planned to be released in 2020.
Ford’s other local joint venture, Jiangling Motors, launched the low-priced SUV, the Territory, in January 2019, followed by its BEV version in August. The Territory is intended to boost Ford’s sales in China by targeting new customers with a price range lower than that of other models of Changan Ford.
Ford Motor: Recent Business Developments in China (As of May 2020)
(Created using Ford Motor’s PR materials and various media sources)
||Product launch plan
||・In September 2019, Ford announced a plan to accelerate product launch, launching at least 18 models (including Lincoln brand) in the market by the end of 2021.
– The new models will include five NEVs.
|Adopting C–V2X technology
||・In September 2019, Changan Ford announced that it will release a service that uses C-V2X technology in the first half of 2020.
||2019 sales result
||・Sales volume of the Lincoln brand dropped 15.7% year-on-year to 47,000 units in 2019 (announced by Ford in January 2020).
||・As of May 2020, Ford’s product lineup in China consisted of seven models, namely the Aviator, Corsair, Navigator, MKC, Nautilus, MKZ and Continental.
– The Corsair is manufactured in China.
||・In November 2019, the Aviator was launched. The model is available in three grades, ranging in price between 628,800–818,800 CNY.
– Local production of the model is planned to begin in 2020 at Ford’s Hangzhou plant.
(owned 32% by Ford)
||2020 sales plan
||・In 2020, Ford aims to sell 331,000 units (including the JMC brand) and generate 32 billion CNY in sales revenue in China (announced in April 2020).
||・In the first quarter of 2020, sales revenue dropped 29% year-on-year to 4.62 billion CNY but net profit increased 2.8-fold to 70 million CNY.
– Net income increased sharply despite decline in sales because demand for ambulances based on the Ford Transit, which has high profit margin, expanded due to the outbreak of the new coronavirus infection.
・In 2019, sales revenue increased 3.3% year-on-year to 29.17 billion CNY and net profit went up 61% to 148 million CNY.
– In 2019, Ford achieved higher sales and profits due to increased vehicle sales and improved cost management.
|Product launch plan
||・In 2020, the new Territory and the China 6 emission standard-compliant Everest are planned to be released.