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April 26, 2006

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Ford Sales Bloom In Emerging Markets

Photo: Ford

Ford Focus

As Ford Focus No. 100,000 rolls off the assembly line in St. Petersburg, Russia, it's a sure bet that someone somewhere will buy it.

Ford's global sales are climbing in countries as far flung as Russia, Turkey, India and China. The increase in sales is being driven not only by popular products like the Focus, but also by Ford's strategy of tailoring the company's activities to the unique qualities of the individual countries.




In Russia, Ford, which is considered an import vehicle, managed to leap from an 8.6 percent market share in March, 2005, to 15.8 percent in March, 2006. In terms of volume, Ford sold 85 percent more vehicles in the first quarter of 2006 than it did in the same time period last year.

Part of Ford's success in Russia is due to the company's decision to open its own manufacturing plant in St. Petersburg back in 2002, making it the first global automaker to take such a step.

"It's a matter of being quicker," said Henrik Nenzen president, Ford of Russia. "We have an advantage over the competition, being the only foreign carmaker to build in Russia."

While Ford in Russia builds the Focus passenger sedan, the company's Otosan plant in Kocaeli, Turkey, concentrates on commercial vehicles. In 2005, the Kocaeli plant produced 233,800 Transit and Transit Connect vans for the light and medium commercial segment, 30,000 units more than in 2004. Commercial vehicles like the Transit models continue to be top sellers all across Ford's overseas markets.

On the sales front, Ford's Turkish operations sold 24,900 cars and trucks in the first quarter, more than 2,900 units above last year. Market share in Turkey was 17.7 percent versus 17.3 percent in 2005, making Turkey Ford's most successful market in terms of share.

According to James Tetreault, vice president, Manufacturing, Ford of Europe, both Russia and Turkey should shatter the existing records this year. "2005 was a successful year for our manufacturing facilities, especially for our newer plants in Kocaeli and St. Petersburg," Tetreault said.

"It is our aim for 2006 to break these records again. In addition to the expansion at Kocaeli, we have also announced a production capacity increase in St. Petersburg from 40,000 now to 60,000 units in 2006."

In India, Ford began with the small Ikon made specifically for that market, then expanded with the Fusion (the European hatchback, not to be confused with the North American sedan), Endeavor SUV, Mondeo and the recently introduced Fiesta.

For the entire first quarter, Ford sales in India were 12,999 units, up more than 60 percent from the same time period in 2005, much of the success driven by the Fiesta.

"Our growth speaks for the excellent value proposition we have on offer with our line up of Ford models in India," said Arvind Mathew, managing director and president, Ford India.

"With a robust portfolio, we are well positioned in the high growth midsize segment. The success of Fiesta is a reaffirmation that Ford is an aspirational brand in India and the models are top quality, well engineered vehicles at a fair value for our customers."

No global automotive operation would be complete without a solid footing in China where Ford is also making inroads. In 2005, Ford brand passenger vehicle sales -- both import and locally produced -- reached a record 64,223 units, an increase of more than 40 percent over 2004 and well ahead of industry growth. Commercial truck sales also soared in 2005, with 18,000 Ford Transits sold, an increase of 48 percent over 2004.

Buoyed by the launch in China of the Focus, first quarter sales for the Ford brand more than doubled from a year ago. To maximize sales, Ford is expanding its network of dealers in China, adding dealers at the rate of approximately one per week with an estimated total of around 200 dealers by the end of 2006.

The long-term, strategic partnership among Changan, Ford and Mazda in China has been developing quickly over the past two years. The three parties are also jointly expanding the capacity of the Chongqing assembly plant, which now claims an annual capacity of 150,000 units and will be further expanded to 200,000 units by May this year. Part of the expanded capacity in Chongqing, in addition to Ford Focus production, is being used for the production of Mazda3 and the Volvo S40.

The three parties are also jointly building a brand new vehicle assembly plant in Nanjing, which will become the second manufacturing base of CFMA and will produce both Mazda and Ford brand vehicles

Along with these markets, Ford is seeing increased sales in Europe, Asia Pacific, South America and South Africa, an upward trend that promises a future for Ford Motor as a global presence in the auto industry.

By Mike Thomas, FCN

(April 26, 2006)

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