Article below from editor's opinion, why Ford China failed, highlights includes 3-cylinder engine, mach-e, ranger, transit...
Ford's entry into China can actually be traced back to 1913, when the Republic of China was just established. At that time, Ford imported 250 Model T cars to China.
It is really well-known by most Chinese users that it established a joint venture company with Changan Automobile in 2001 (Ford China was first established in 1995).
Ford's highlight moment in China. In 2016, Changan Ford's sales volume reached 957,500 vehicles, which is only a step away from million sales. The names of the main sales models are still echoed in the Chinese user groups: Mondeo, Focus, Explorer and so on.
However, since 2017, Ford's sales in China have begun to fall off a cliff. In 2019, it reached a freezing point, with sales of only 184,000 vehicles. Although Ford China's sales have picked up after launching a number of new models, Ford's decline has gradually begun to emerge since 2021.
The process of Ford China's "retreat" was actually accompanied by struggle, transformation and self-help. Among them, several key figures marked several nodes.
The first is the decline in 2017. The landmark event is that the 3-cylinder engine gradually occupies all configurations of the flagship model Focus.
The pros and cons of the 3-cylinder in terms of technology and experience are not discussed here. But in the Chinese market, the facts are there: the use of 3-cylinder fuel vehicles is the original sin, and whoever uses them will die, and it can even ki-l a normally operating car company to the brink of death (refer to Nissan X-Trail), which has almost become an iron law.
In 2019, the entire Focus series was replaced with a 3-cylinder, and Ford's sales also dropped to freezing point.
It was Ford CEO Jim Hackett who made this decision at the time. He was born in the furniture industry and had no previous experience in the automotive industry. Ford came to him because he was in a hurry, because the intelligent transformation led by the former CEO Mark Fields was too radical, which caused Ford to devote too much energy to new businesses, resulting in the loss of its traditional businesses.
Hackett's main strategy is to save money, such as upgrading the 3-cylinder, cutting off the unprofitable car business, etc., but at the same time saving money, open source has not improved, especially in the face of the epidemic, Ford's losses are even worse.
Hackett resigned in October 2020. On the day he announced his retirement, Ford's stock price rose 3%.
Ford China, under the influence of the ups and downs of Ford's parent company, has also started transformation and self-help under the leadership of the new chief executive Chen Anning.
Chen Anning joined Ford in 1992 and has experience in small vehicle development, platform technology research and development, joint venture business expansion and so on. In 2010, Chen Anning went to Chery and served as the dean of the General Institute of Automotive Engineering Technology R&D, leading the reshaping of Chery's R&D system.
In 2018, Chen Anning was invited back to Ford China to "fight the fire" as President and CEO. Ford China 2.0 is actually led by him.
His main idea, on the one hand, is to update Ford's existing fuel-fueled models to save sales, and on the other hand, it is oriented towards new energy and intelligent transformation, especially emphasizing localized research and development in China.
But obviously, Ford China is just a subsidiary company, and its rights and resources will naturally be controlled by the parent company, and the shocking transformation of Ford headquarters is not over yet.
Jim Farley, who replaced Hackett as CEO, completely changed the direction and strategy of Ford China.
Not surprisingly, Chinese users did not buy Ford electric vehicles at all, and Mach-e hit the street hard.
This not only "idle" Chen Anning's resources and teams that had been concentrated in the Ford 2.0 strategy, but also completely ruined Ford's qualifications to speak in the transformation of China's auto industry revolution.
Chen Anning announced his retirement at the beginning of this year, and Ford China's transformation vision has also been shattered for the most part.
Another move by Jim Farley is to shift the focus of cooperation to Jiangling Ford. At this year's Shanghai Auto Show, Jim Farley went straight to Jiangling, bypassing Chang'an, China's largest partner.
In fact, it is easy to understand that Changan Automobile is committed to self-reliance and self-improvement. Deep Blue, Avita, fuel vehicles, Blue Whale Hybrid, etc. are all flourishing, and there is no need for joint venture brands to contribute profits or support appearances.
And Jiangling is the weaker party. It has nothing of its own and relies more heavily on Ford.
To some extent, Ford has actually "defeated" China.
First of all, intelligence and new energy have suffered a crushing defeat. Compared with BYD, new forces, and even the transformed products of traditional car companies such as Great Wall Geely, Mach-e is not even capable of fighting.
Secondly, while new energy vehicles hit the street, the product strength and competitiveness of fuel vehicles also lag behind independent brands in an all-round way. This is reflected in the fact that Ford first used a three-cylinder car to destroy its accumulated reputation.
When Ford "remedied the trouble" and returned to the four-cylinder, it was too late. China has set off a wave of hybrid fuel alternatives, with lower fuel consumption, better performance, higher configuration, and the key is cheaper....
In the end, the cooperation with Changan has gradually reached a trough, which also indicates that Ford China's future sales will hardly make a big improvement.
Because Jiangling Ford focuses on freight commercial vehicles (Ford Transit). Passenger cars are the Everest and Ranger pickups for outdoor off-road enthusiasts. They are destined to be a niche market. Besides, the independent Great Wall has an absolute advantage, and BYD is eyeing.
Due to several factors, the fate of Ford China has gradually become clear.
What's next for Ford?
After this turmoil, what is left of Ford China?
Two joint ventures: Changan Ford, which suffered a huge loss in production and sales, and Jiangling Ford, which was marginalized. And several factories with a total capacity of nearly 2 million.
Among them, Changan Ford's fuel vehicles are declining day by day, and there is no news about the launch of any new models in terms of new energy. Moreover, with Changan's current strength and ambition, it is estimated that there is not much willingness to help Ford explore transformation.
Jiangling Ford has already said that the off-road vehicle pickup business will grow. After all, Ford has a good reputation among this user group.
Ford, a century-old car company, retreated to China: a huge loss of 4 billion, layoffs of thousands of people, and a year's sales of trams are not as good as new powers for a week
However, the ceiling of this track has been sealed by Great Wall BYD. It is difficult for Ford to compete in both hybrid technology and cost-effectiveness, and there is limited room for growth.
So the fate of Ford China will probably be like this:
Changan Ford cannot escape the fate of gradually withdrawing, and Lincoln can still support it for a while with second-tier luxury.
As for Jiangling Ford, it can survive on vans and off-road vehicles that pull goods, but it is difficult to become the mainstream.
Ford's role in China can refer to today's JEEP, becoming a niche-oriented brand.
As for the Ford factories in China, most of them turn to fuel vehicle manufacturing and export to the global low-end car consumer market.
The trend of the Chinese market is already obvious: the cost-effectiveness, the joint venture brand can't compete with Wuling BYD. If you go technology, you can't compete with new forces; if you go luxury, the window period is getting smaller and smaller.
The deep-seated reason is that old foreign-funded car companies have been slow to transform, and they have always held an arrogant or even "contemptuous" attitude towards the Chinese market: they think that Chinese users are stupid and have a lot of money, and they can become popular with their logos...
This way of playing cannot keep up with the current era of China's development, and it also makes these established car companies miss the best transformation window period and lose their competitiveness.
The market will punish all car companies that are lagging behind in the wave of electrification and intelligence: the Korean legal system has already hit the street, the Japanese system is in decline, and the American system is retreating.