China car market may need 'Two Fords'

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Six years ago, the Six years ago, the "One Ford" mantra saved Ford Motor Co from collapse. (Reuters)
SummarySix years ago, the "One Ford" mantra saved Ford Motor Co from collapse. Now,...

Fiesta, Ford's cheapest model, starts at $12,300. About one-fifth of China vehicle sales this year were priced less than $12,000, according to J.D. Power and Associates.

Next year, Ford will launch the Fiesta-based Ecosport compact, which will be the lowest-priced SUV in its portfolio.

Ford also plans to introduce "several low-cost models," including the "Value B" compact, by 2015, according to Dave Schoch, who will become president of Ford's Asia Pacific operations on Dec. 1."We recognize that we've played at this higher end and we have a huge opportunity to expand our segment coverage in the market," he said in an August interview.

Next year, more than 65 million people in China will have annual incomes of at least 60,000 yuan ($9,600), the point at which they can afford a simple, no-frills car, according to U.S. consultant Alix Partners.

Ford executives said the new "Value B" car will rival the 57,000 yuan ($9,100) Chevrolet Sail, a subcompact designed, developed and manufactured in China by GM and its partners. The Sail is the second-best selling vehicle in China.

To make this possible, Ford is broadening its local supply base to cut costs and boost margins for low-cost models, executives said.

Schoch said he worries if Ford is moving quickly enough in China."Are we moving the organization fast enough to take advantage of this? Let's face it. We're pretty slow sometimes," he said.

($1 = 6.2326 Chinese yuan)

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