Ford to ex­pand China R&D: re­port

China Daily (Canada) - - FRONT PAGE - By MICHAEL BAR­RIS in New York michael­bar­ris@chi­nadai­lyusa. com

A re­ported plan by Ford Mo­tor Co to ex­pand its re­search and de­vel­op­ment oper­a­tion in China by boost­ing its work­force by 50 per­cent to about 2,000 people by 2018, would help Ford “an­tic­i­pate and re­act faster to con­sumer and mar­ket changes in China, and in other growth mar­kets in Asia”, a mar­ket an­a­lyst said.

The Dear­born, Michi­gan, au­tomaker plans to in­vest $100 mil­lion to hire the additional work­ers, con­struct a new build­ing and build a test track at its Re­search and En­gi­neer­ing Cen­ter in Nan­jing, south of Bei­jing, the Wall Street Jour­nal’s web­site re­ported Thurs­day.

A spokesman for Ford could not be reached for com­ment on the re­port.

The Jour­nal post­ing quoted John Lawler, chief ex­ec­u­tive of Ford Mo­tor China, as de­scrib­ing the ex­pan­sion of the re­search and en­gi­neer­ing cen­ter, or REC, in the east­ern Chi­nese city of Nan­jing as “one of our top global-prod­uct-de­vel­op­ment pri­or­i­ties.”

“Grow­ing REC — one of eight such cen­ters in Ford’s global sys­tem — al­lows our global team to bet­ter in­te­grate lo­cal cus­tomer in­sight from China and from Ford’s other Asia Pa­cific mar­kets into global prod­uct de­vel­op­ment pro­grams,” Lawler was quoted as say­ing.

Tim Dunne, di­rec­tor of global au­to­mo­tive in­dus­try anal­y­sis for Cal­i­for­nia-based mar­ket­ing in­for­ma­tion ser­vices com­pany JD Power and As­so­ciates, told China Daily the re­ported in­vest­ment in Ford’s R&D fa­cil­ity in China continues a pat­tern of strate­gic ex­pan­sion in the coun­try for the sec­ond-largest US au­tomaker.

“Ford more than dou­bled pro­duc­tion of Ford-branded ve­hi­cles in China be­tween 2011 and 2013, from 318,000 to 685,000 ve­hi­cles,” Dunne said.

Ford’s Detroit ri­val, Gen­eral Mo­tors Co, was among the first global auto mak­ers to in­vest in a sub­stan­tial R&D fa­cil­ity in China, “and the move paid nice div­i­dends for the com­pany, with GM able to get prod­ucts to mar­ket faster,” Dunne said.

In 2013, Dunne said, Ford sold about 680,000 lo­cal­lypro­duced Ford-branded ve­hi­cles in China. “Through the first two months of 2014, Ford sold about 150,000 pas­sen­gerve­hi­cles, an in­crease of nearly 60 per­cent year-over-year for the pe­riod, by far the fastest year-over-year growth among global auto brands.

“The per­for­mance also means Ford now has a 4 per­cent share of the pas­sen­ger ve­hi­cle mar­ket, plac­ing it among the top five pas­sen­ger car mar­ket share lead­ers in China.”

Dunne said the Ford Fo­cus com­pact car ac­counts for more than half of Ford’s pas­sen­ger ve­hi­cle sales. “But the of­fer­ing of two small SUVs (the Kuga and Ecosport) have con­trib­uted sub­stan­tially to sales growth, as has the new Mon­deo mid­size pas­sen­ger car,” Dunne said.

The re­ported ex­pan­sion plan comes as GM and Ford both en­joy strong China sales gains. GM re­ported a 20 per­cent jump in Fe­bru­ary sales while Ford posted a 67 per­cent surge from a year ear­lier.

GM and its Chi­nese ven­tures re­ported com­bined ve­hi­cle sales of 257,770 for the month – fol­low­ing on a 12 per­cent sales climb in Jan­uary and an 11.8 per­cent rise in De­cem­ber.

Ford said Thurs­day it sold 73,040 ve­hi­cles in China dur­ing Fe­bru­ary, com­ing on the heels of a 53 per­cent sales rise in Jan­uary and a 35 per­cent jump in De­cem­ber.

GM, with part­ners FAW Group and SAIC Mo­tor Corp, has sold 605,831 ve­hi­cles in China since the start of 2014. Ford, part­ner­ing with Chongqing Changan Au­to­mo­bile Co and Jian­gling Mo­tors Corp, has sold 167,506 ve­hi­cles in China since Jan­uary.

The‘

per­for­mance also means Ford now has a 4 per­cent share of the pas­sen­ger ve­hi­cle mar­ket, plac­ing it among the top five pas­sen­ger car mar­ket share lead­ers in China.” TIM DUNNE DI­REC­TOR, GLOBAL AU­TO­MO­TIVE IN­DUS­TRY ANAL­Y­SIS FOR JD POWER AND AS­SO­CIATES

Ford plans at its Nan­jing R&D out­let to in­crease the num­ber of em­ploy­ees to around 2,000 people by 2018 by adding around 200 new em­ploy­ees each year, ac­cord­ing to the Jour­nal re­port. To date, the com­pany has in­vested more than $200 mil­lion in the fa­cil­ity. The ex­pan­sion plan in­volves an additional in­vest­ment of $100 mil­lion.

When Ford moved into the cur­rent fa­cil­ity in 2007, the cen­ter had around 300 em­ploy­ees.

Ford Mo­tor Re­search & En­gi­neer­ing (Nan­jing) Co cur­rently has about 1,300 em­ploy­ees.

Ford said it is adding a third build­ing in Nan­jing com­plex, but pro­vided no additional de­tails on tim­ing. Ford’s cur­rent fa­cil­i­ties can ac­com­mo­date 1,600 em­ploy­ees, the Jour­nal re­ported.

Ford is also adding a test track at a lo­ca­tion 100 kilo­me­ters from the Nan­jing fa­cil­ity. Ford didn’t give a time­line, say­ing only in a state­ment that it was work­ing to make the track “op­er­a­tional as early as pos­si­ble.”

A spokesman wrote the Jour­nal that the test track would help its re­searchers based in the Nan­jing area to ex­pand their ve­hi­cle-de­vel­op­ment ca­pa­bil­i­ties and al­low them to play a big­ger role in Ford’s new global-ve­hi­cledesign pro­grams.

In Fe­bru­ary, Lawler said he ex­pected Ford’s sales growth in China would out­pace growth in the broader Chi­nese auto in­dus­try this year. He ex­pects China’s auto in­dus­try to grow be­tween 7.5 per­cent and 8 per­cent this year. In the same in­ter­view, Lawler fore­cast Ford would sell more than 1 mil­lion ve­hi­cles in China in 2014.

Un­der a 2011 plan, Ford com­mit­ted to in­vest $5 bil­lion in China to ex­pand the num­ber of its man­u­fac­tur­ing fa­cil­i­ties there to nine from four. A new plant in the east­ern city of Hangzhou that cost $760 mil­lion and has a ca­pac­ity to build 250,000 ve­hi­cles a year will open in 2015, the Jour­nal re­ported.

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