Photo Credit: Ford Motor (NYSE:F)
The situation developing for Ford Motor Company (NYSE:F) in China right now is a very interesting one, and it’s almost a hidden success. When I say hidden success, I mean that if you look at the quarterly earnings reports you won’t see much profit coming from China, if any. That won’t be the case for long; by the end of the decade Ford expects China to represent as much as 40% of its revenues. As large capital investments in the region begin to slow, more of those revenues will carry to the bottom line – quickly driving Ford’s earnings higher.
It will take time and a lot of money because doubling Ford’s market share in China by 2015 is no easy task – yet Ford Motor Company (NYSE:F) expects to accomplish this goal. In addition to the 15 new models it will launch in China by mid-decade, it also takes an understanding of the culture, which Ford is continuing to gain knowledge of. Ford’s Kuga is a good example of this knowledge turning into success.
One of the reasons Ford Motor Company (NYSE:F) set record numbers in China, which I’m about to show you, was because of the Kuga compact crossover. It is a tweaked version of the Escape that we see every day, because in China many people that can afford the vehicle are businessmen who employ drivers and need luxurious and more spacious back seats to do business with clients. Ford was able to squeeze out some extra leg room using a couple tricks, and also upgraded the materials to give a more premium feel.
The Kuga is a hit with consumers, it’s helped lead to the impressive sales figures in China. With the first six months of 2013 in the record books, Ford’s sales in China increased 47% to 407,721 in wholesale units. The month of June alone was up 44% compared to last year and both figures set records for Ford Motor Company (NYSE:F).