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Ford should learn from GM's hot-selling entry-level models
Yang Jian | 2017/11/10

SHANGHAI -- After enjoying explosive growth in China from 2012 to 2015, Ford has run out of steam.

Sales are stagnant and the U.S. automaker is losing market share to upstart rivals such as Geely and Great Wall. 

Ford has hired a new China CEO, Jason Luo, who is reportedly developing a turnaround plan. But he won¡¯t have to look far for inspiration. All he has to do is emulate General Motors.

And if he does study GM, he will see that fresh products are essential for growth.

In the first 10 months, GM¡¯s various brands have introduced eight new models in China. Four of them are crossovers or SUVs -- products that enjoy strong demand in China. 

By contrast, Ford has not introduced any new models this year.

Moreover, Ford has not followed GM into China¡¯s fast-growing entry-level market. Like other global automakers' lineups, Ford¡¯s is generally much pricier than those of Chinese brands. 

Ford has focused primarily on consumers in China¡¯s relatively mature urban markets. But consumers in small towns and rural areas are generating strong demand for more affordable vehicles. 

To tap this market, GM and partner SAIC Motor Corp. created the entry-level Baojun brand in 2009. 

Baojun has steadily expanded its product lineup from small sedans to small multipurpose vehicles, compact crossovers and small SUVs. The strategy has paid off for GM.

Baojun¡¯s sales have surpassed Chevrolet, and now it¡¯s catching up to Buick. In October, Baojun sold 104,755 vehicles, well above Chevrolet¡¯s 61,065 deliveries, and close to Buick¡¯s sales of 107,297.

Baojun has lower profit margins than GM¡¯s other brands, but its inexpensive Chinese engineering and componentry help minimize production costs.

Other foreign automakers have noticed, too. After years of indecision, Volkswagen Group is preparing to launch an entry-level brand.

But Ford -- restricted by its One Ford philosophy -- still sells vehicles derived from its global platforms. Because Ford lacks a portfolio of China-only entry-level models, it has limited itself largely to China¡¯s cities.

Ford once enjoyed explosive sales growth in China with the Focus sedan and small crossovers such as the EcoSport and Kuga. But success bred inertia. 

With no new models and no foothold in China¡¯s rural market, Ford¡¯s October sales declined 5 percent from a year earlier to 106,000 vehicles.

By contrast, GM delivered 383,000 vehicles in China last month, up 11 percent.

At a time when China¡¯s auto market is leveling off, most global automakers are stepping up efforts to introduce new products.

Unless it can move quickly to expand into China¡¯s rural market, Ford will continue losing ground.

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