BEIJING SHOW: Ford JV to build S-Max 'people-mover'
Ford has announced that it will build the Ford Europe-designed S-Max minivan - newly named Car of the Year 2007 here in Europe - in China.
The model, which the automaker describes as a "sporty people-mover", makes its Chinese debut at the Beijing motor show tomorrow (17 November) and, starting early next year, will be built by Changan Ford Mazda Automobile for local sale.
The S-Max is the latest Ford Europe-designed model to be built in China, joining the Fiesta, Focus and Mondeo, all of which are also locally built at the automaker's joint ventures.
The Changan Ford Mazda Automobile-built Focus is Ford's largest-selling model there. Retail sales in the first 10 months of 2006 totalled 56,151 units, accounting for over half of the automaker's sales. Ford launched the model in 2005 as a sedan - this body style is more popular in China than the hatchback that dominates European sales - and only added the hatchback model last August.
The locally-produced Mondeo, which has a more luxurious rear cabin than European versions because many owners are chauffeur-driven, is also doing well in China, with volume up 33% year on year in the first three quarters of 2006. This model was voted China's Car of the Year in 2005.
"In the future, Chinese customers can continue to expect more exciting, locally-made Ford vehicles that consistently deliver cutting-edge design and world leading technology, "said Mei Wei Cheng, chairman and CEO of Ford Motor (China).
Ford plans to increase product development collaboration between Europe and China due to the similarities between the two markets.
"China's auto regulations are becoming very similar to European regulations, so there is a natural synergy with China's and Europe's products," said John Shelton, Ford's product development director, Asia Pacific & Africa.
"China regulates fuel economy differently, however, and is not as diesel-centric as Europe."
In addition, European vehicle design and function generally meets the needs of many Chinese consumers. "Much like the rest of the world, there's an emerging middle class, typically younger, and they want the very stylish vehicles that Europe is producing now," noted Shelton.
He added: "We are working hand-in-hand with Ford of Europe as we define new product needs, and we are moving further and further upstream to marry those common programmes from the beginning."
Ford of Europe said that the interest in its new products from Chinese customers is having a "profound" effect on its product development process.
"Our development teams in Dunton and Merkenich are now considering Asia Pacific and African market requirements in their programmes from the outset," said John Fleming, Ford of Europe president and CEO.
"We work very closely with the region and will continue to do so for all of our major new products, tailoring them or looking at specific derivatives for these markets as appropriate."
Ford has also announced a major new investment - a research and engineering centre - to be located in Nanjing. It will support product development for worldwide operations as well as China's auto market.
"The [R&D centre] represents another major milestone for Ford as it strengthens its manufacturing blueprint in China… It will also work with technical development centres at Ford's joint ventures in China to support product development and procurement," said Mei Wei Cheng.
Ford claims its Changan Ford Mazda Automobile joint venture is now one of the fastest growing auto makers in China. In 2007, total annual production capacity will exceed 410,000 units at Chongqing and Nanjing plants (combined). The automaker is also expanding its distribution network and will have 200 dealers by the end of this year.
"It is no secret that the China market is critical to our plans for building a stronger [company] globally," said Mei Wei Cheng. "With sales volumes continuing to fuel growth, we are looking ahead and taking the required steps now to ensure our China operation is able to continue to meet the seemingly insatiable appetite for our products. In doing so, the China market will play an even greater role in the future growth and success of Ford's global operations."