Ford Opens 40 New Dealerships in China

As part of Ford's strategy to increase sales in the world's biggest automotive market, China, the company has inaugurated 40 new dealerships on Wednesday. Its goal is to have 100 new dealerships this year, mostly in secondary, inland cities, where demand for cars is surging, adding up to a total of 340.

"Following the call to 'Go West,' we are expanding west and in developing cities in China where most of the future growth here in the world's largest automotive market will come from," said Joe Hinrichs, president of Ford, Asia Pacific and Africa, and chairman and CEO of Ford China.

Cities like Nanning, Shijiazhuang, Harbin and Anyang are relatively unknown outside of China, but have populations well over one million and could help lead the next wave of growth in the Chinese economy, Ford believes.

These remote markets should "grow steadily and reach the stage over the next several years where more people can afford vehicles," said Hinrichs. "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."

The problem with foreign automakers is that many of them, including Ford, now have low-priced models that are in demand in these second-tier Chinese cities. Meanwhile, the number of Chinese households with annual income of more than 60,000 yuan (about US $9,000), which is a sufficient level for a family to buy an entry-level car, is expected to double in the next four years, according to analysts in the US.

Ford's cheapest model that's currently sold in China is the Fiesta, with prices between 79,000 yuan (US $11,900) and 110,000 yuan (US $16,540). But cars in high demand among entry-level buyers are those priced around 60,000, such as the Chevy Sail, which starts at 57,000 yuan (US $8,570).

Ford has plans to introduce four new models in the next three years in China, including the Ford Edge crossover next month.

"We see potential for the Ford brand to extend across many different price segments in the marketplace," including "opportunities for us to go down in cost and price," the Ford executive said. "We will have more to say about that over time."
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