Ford to Expand China Operations

Auto manufacturers are always looking for ways to increase their presence in the global auto market. Increasing profit involves venturing to other markets aside from one’s very own. That is why car manufacturers such as the Ford Motor Company are steadily increasing their coverage by expanding their global market.

Recently, the member of the U.S. auto market’s Big Three announced that they will be expanding their operation at the world’s second largest auto market. China, the giant of a country, is now steadily increasing its demand for vehicles as the country becomes more and more progressive.

Mei-Wei Cheng, the vice-president of the Ford Motor Company and the Chairman and Chief Executive Officer of the Ford Motor China, officially announced their expansion in a news conference. Among other concerns that Cheng reported is the official start of production of engines at the Ford Mazda Engine Company. Cheng announced that the production will start “very soon”. The engines to be produced at the said facility will be used to meet the demand for Ford and Mazda vehicles in the country.

Cheng also announced that the newly opened Ford Mazda Automobile Company will begin production of vehicles to be released in the China auto market will begin before the end of 2007. The automobiles to be assembled at the said facility will be suited to the needs of Chinese motorists. The Ford Motor China also announced that the newest generation of the Ford Mondeo will roll out of their production facility within this year. Cheng announced that the Changan Ford Mazda Automobile Company in Nanjing will be producing small cars.

During his talk, Cheng also announced that the Ford Motor Research & Engineering was recently given approval by the Chinese government. He said that the facility will give the Ford Motor China significant boost in engineering. The institution will also help Ford Motor in the global scale as Ford China will be in a position to help its parent company in designing future models.

“These collective announcements underscore Ford Motor’s commitment to the China market and China’s growing importance to our overall global strategy,” says Cheng. “Ford Motor China now encompasses one of the most comprehensive and competitive operations in the Chinese market, including full-scale vehicle and engine production; research, development and engineering; sales; after sales services; and auto financing. Our local partnerships and the smooth implementation of our China strategy have greatly contributed to Ford becoming a leader of China’s automobile market,” he added further.

As part of the press conference, Cheng announced that the lineup of Ford China will include different vehicle body types such as “premiere and mid-size vehicles, small cars, SAVs, SUVs, and commercial vehicles,” according to Cheng. He also pointed out that the company is offering Ford models which have and is currently popular in the European market. “Our hugely successful European products have also proven to be very popular among Chinese consumers,” Cheng said. “From the hot selling Focus to the eye-catching S-MAX, and now the sleek Mondeo, Ford will continue to introduce our latest auto design engineering concepts to the China market. This will be supported by our renowned professional sales and after sales services, as well as our creative ‘Make Every Day Exciting’ brand campaign,” added Cheng further.

Ford’s business operation in China dates back to 1913 when the most popular car in the world is the Model T. Eighty-eight years later, Ford entered into a partnership with the Chinese company Changan Automotive Corporation. The joint venture was then called the Changan Ford Automobile Corporation. Then, in 2006, Mazda joined the venture and its name was then changed to the Changan Ford Mazda Automobile. With the expansion of this operation more and more Chinese will have access to Ford vehicles which can be equipped with ford cold air intake systems.

Ford is in Troubled US Operations

Ford is currently facing some troubles in its operations. It might be doing fairly well overseas but is having very poor operations in the United States.

Latest reports say that Ford’s Volvo vehicle may be bought by German automaker BMW. According to Merrill Lynch, Ford could sell its premium brands, which also include Jaguar and Land Rover, at an estimated cost of $9 billion.

With $18.2 billion as the cost of US operations for the first three months this year, ford lost almost $3 billion. Revenue of $12 billion for the first quarter was achieved on its overseas units which include South America, Europe, and Asia. Operating income of $251 million was also achieved. And if the operations of the premium group are added, their revenue would rise to $20 billion and operating income could reach $400 million.

Part of the US arm of the company is many of Ford’s legacy problems with its units. Majority are on retirement, pension, and health-care costs. And most of the company’s debt is in its financial services operation. Ford’s balance sheet depicted $137 billion of the $167 billion.

DaimlerChrysler (DCX) has just halted its US operations. There is really no other way to look at the sale of Chrysler to minimize Cerberus fund operation.

It is about time that Ford should do the same. According to an article in Business Week, Alan Mulally, the company’s new CEO, is having some difficulty at present as regards to Ford’s fixed management structure. Restructuring the company may solve some of that.

Shareholders, including the Ford family, could earn something. This could be another benefit of Ford’s breaking off international operations. In the first three months in the current year, BMW has reached the revenue of an estimated $16 billion. The company, however, was good in terms of profit as well as its stock.

The UAW would have very little bargaining power this Fall Season due to the very little left for Ford in America beyond union contracts, debt, and continuously declining revenue.

Ford has to be strong or else they will not be able to make it. Both the management and its employees need to focus in immediately solving this problem.

About Ford Motor Company

An American multinational corporation, Ford Motor Company, based on the worldwide vehicle sales, is the third largest automaker in the world. Maker of quality Ford oxygen sensor, Ford ranked seventh as an American-based company in the 2007 Fortune 500 list. This was based on the company’s global revenues of $160.1 billion. Ford produced about 6.6 million automobiles and employed about 280,000 employees to its nearly 100 plants and facilities around the world in 2006.

Founded by Henry Ford in June 16, 1903, the company now has several global brands. These include Lincoln and Mercury of the US, Jaguar and Land Rover of the UK, and Volvo of Sweden. The company also owns Mazda’s one-third controlling interest.

About BMW

BMW is the abbreviation for Bayerische Motoren Werke or Bavarian Motor Works, in English. This German company is an independent manufacturer of automobiles and motorcycles. With the English company slogan “The Ultimate Driving Machine”, BMW is from where the MINI and Rolls-Royce car brands came. It was also the owner of the Rover.

About DaimlerChrysler

DaimlerChrysler AG is a German car corporation and the fifth largest car manufacturer all over the world. It manufactures trucks and automobiles. It also provides financial services through its DaimlerChrysler Financial Services arm. The major stake in aerospace group EADS is also owned by the company.

Established in 1998, DaimlerChrysler was formed when Mercedes-Benz manufacturer Daimler-Benz of Baden-Württemberg merged with Chrysler, a US-based corporation. Unfortunately, the fuser was not able to produce the trans-Atlantic automotive powerhouse dealmakers had anticipated for. On May 14, 2007, DaimlerChrysler made an announcement that it would sell Chrysler to a private equity firm in New York, the Cerberus Capital Management. It specializes in restructuring troubled companies and effectively unwinding the original transaction.

The failed German merger company will use the name Daimler AG, with pending shareholder approval. Chrysler Holdings, a US company will be owned by a private firm.

Chrysler, Dodge, Jeep, Mercedes-Benz, Smart, Maybach, and GEM are the cars and truck brands that DaimlerChrysler manufactures. Moreover, it also provides parts and accessories in the market under the brand name Mopar.

About Merrill Lynch

Through its subsidiaries and affiliates, Merrill Lynch & Co., Inc., provides global capital markets services, investment banking and advisory services, wealth management, asset management, insurance, banking and related products and services. With headquarters located in New York City, the firm is one of the well known and recognizable names in financial services. It has a 34-storey building at the Four World Financial Center in Manhattan.

Ford Expands Operations in China

Ford manufacturer of Ford mufflers has recently made several strategic announcements that will support its forward-moving business direction in China focusing on the company’s rapidly expanding presence and increasingly competitive position in the world’s second largest automotive market.

On a formal press conference held at the Ford stand, Mei Wei Cheng, Vice President of Ford Motor Company and Chairman & CEO of Ford Motor China announced the following:

1. The official start of volume production at the Changan Ford Mazda Engine Company would begin very soon.

2. The production at the new Nanjing facility, Changan Ford Mazda Automobile Company (CFMA) will commence before the end of this year.

3. The third generation Ford Mondeo will start production at Changan Ford Mazda Autombile’s Chongqing plant later this year.

4. An all-new Ford small car is to be produced at the Changan Ford Mazda Automobile Company Nanjing plant in 2008.

Moreover, Cheng referred to Ford Motor Research & Engineering (Nanjing) Co. Ltd. in his speech, which received government approval last March for its role as an integral part of Ford Motor Company’s global research & design. Cheng said that this new operation will boost Ford China’s local engineering capabilities as well as strengthening the sourcing capability for manufacturing in China and at the same time support Ford Motors global manufacturing.

According to Mr. Cheng, “These collective announcements underscore Ford Motor’s commitment to the China market and China’s growing importance to our overall global strategy. Ford Motor China now encompasses one of the most comprehensive and competitive operations in the Chinese market, including full-scale vehicle and engine production; research, development and engineering; sales; aftersales services; and auto financing. Our local partnerships and the smooth implementation of our China strategy have greatly contributed to Ford becoming a leader of China’s automobile market. Ford’s complete line up of cars in China now includes premiere and mid-size vehicles, small cars, SAVs, SUVs, and commercial vehicles.”

The sleek, third generation Ford Mondeo and recipient of quality Ford muffler was used in the latest James Bond movie “Casino Royale” which showcase Ford’s special European kinetic design language and world class technology. It follows the path of the S-MAX which was chosen as the ‘Car of the Year for 2007’ and to become the next Ford model to be produced in China.

Mr. Cheng said “Our hugely successful European products have also proven to be very popular among Chinese consumers. From the hot selling Focus to the eye-catching S-MAX, and now the sleek Mondeo, Ford will continue to introduce our latest auto design engineering concepts to the China market. This will be supported by our renowned professional sales and aftersales services, as well as our creative ‘Make Every Day Exciting’ brand campaign.”

Ford Motor Company and its five affiliated brands are showcasing 53 exciting vehicles at its Auto Shanghai 2007 stand. For its third generation Mondeo, Ford will showcase its kinetic design language with the sculpted iosis X sports crossover concept together with the CFMA produced S-Max, and C-Max, which is making its very first China debut.

The very popular Ford Focus lineup will also be featured on the Ford stand with the 2007 Focus, the European-imported Focus ST, Focus China Circuit Championship Racing Car, and the 2006 Focus RS ‘World Rally car’. Ford Motor Company and the CFMA have become one of the leaders in China’s growing auto industry with an impressive 86.6 percent increase in China market sales for 2006 which is far ahead of the overall industry average. The CFMA’s first quarter sales have totaled 38,908 units or 40.8 percent increase over the same period a year ago.