New Ford SUV, but only for China
Ford is hoping to better compete in the largest auto market in the world by unveiling a new midsize sport utility vehicle designed for China that targets shoppers wanting more vehicle space for less money.
The SUV, called Territory, “is a very important product for us _ for investors, for stakeholders, for employees, for dealers,” Jim Farley, Ford vice-president and president of global markets, said in an interview with the Free Press.
“This is Ford competing in lower price points than we have in the past. And this is a completely indigenous product. It is not derived from a Ford product elsewhere. It was developed by our local partners. This is not a One Ford product. This is a China-only product.”
Until now, Ford and other automakers have noted the luxurious appetite of Chinese car buyers. This new vehicle is designed for residents of fast-growing cities not currently served by Ford.
“Territory has that Ford swagger everyone loves,” Farley said. “This is a demonstration of our intent to profitably grow in China.”
The SUV, developed with Ford’s joint venture partner Jiangling Motors Corp., will be manufactured at a plant in Xiao Lan.
Ford made its announcement in China last week, the first such product launch with its joint venture partner. The companies are hoping to find customers all across China rather than in the megacities.
China’s fastest auto market growth is in more affordable segments now, Farley said. “This is a new nameplate, a new product and it competes differently than in the past. It has a large interior size and a lower price. This will be one of several vehicles we’ll be launching in the next several months.”
The hard push in China comes just weeks after a rough secondquarter earnings report delivered by Farley. He promised new products amid confession of serious shortfalls “including inadequate dealer profitability, excess stock” and a failure to maintain fresh products for a rapidly changing market.
China is growing to twice the size of the U.S. market by 2025, Farley told analysts in July. “I can assure you, we understand the importance of getting our China business back on track.”
Ford has struggled with sales and personnel in China, losing its most recent CEO there in January after only five months in the role when he resigned for stillunknown personal reasons.
Last week, Farley said: “We have been addressing these operational issues that are really the foundation of our revenue capacity in the market.”
At stake? Hundreds of millions of dollars.
Ford will reveal the price when the new Territory goes on sale in early 2019. Ford also plans to launch a new version of Focus and Escort in China in coming months as it moves on a plan to deliver 50 new vehicles to the market by 2025.
“The Territory is a breakthrough for Ford in China in terms of our ability to successfully compete with Chinese automakers for millions of customers that we do not currently serve,” said Peter Fleet, president, Asia Pacific, and chairman & CEO, Ford China.
Jiangling provided input on Chinese lifestyle and product preferences, while the Ford team leveraged its expertise to design, engineer and test Territory.
Farley noted that demand for cars in China will come not from traditional “Tier 1” cities such as Beijing and Shanghai, which have implemented licence plate restrictions to manage traffic congestion, but rather from smaller but fast-growing cities in the interior of the country.
Ford promised that Territory customers could choose from a fuel-efficient gasoline engine option, a mild hybrid or a plug-in hybrid power train. The SUV will offer Ford’s infotainment system with intuitive Mandarin voice-command function and a suite of driver assistance technologies, incorporating features such as adaptive cruise control.
Ford China also sells the EcoSport, Kuga, Edge, Explorer and Everest.