Ford Launches Its First China Car

SHANGHAI, Jan 14, 2003; Reuters reported that U.S. Ford Motor Co will launch its first made-in-China car on Saturday, hoping to win a slice of the world's fastest growing auto market after losing a key project to General Motors Corp eight years ago.

Ford will unveil its Fiesta small car -- modelled on the European Ford Fiesta but with more than 200 modifications to suit Chinese buyers -- at a $98 million plant in the western city of Chongqing, spokesman Kenneth Hsu said on Tuesday.

Analysts expect the 1.3-litre engine car to sell at about 100,000 yuan ($12,080) and target a family market already crowded by GM's Sail, Volkswagen AG's Polo, Toyota Motor Corp's Vios, Fiat Auto SpA's Palio and others.

"Competition in the 100,000 yuan market is already intense and Ford's entrance is quite late. If they had launched early last year, it would have been a better time," said Guotai Junan Securities analyst Zhang Xin.

"The Ford name is attractive, but whether this joint venture can be profitable remains to be seen," he said.

The $98 million ChanganFord Automobile Corp Ltd is half-owned by Ford and half-owned by Chonqging Changan Automobile Co Ltd, China's biggest minivan maker which already makes low-end compacts with Suzuki Corp.

Ford said last June the venture would have an annual capacity of 50,000 vehicles, which may be expanded to 150,000. The partners declined to give more details on the Fiesta on Tuesday.

Ford is a relative latecomer to China, where annual car sales surged by more than half to top the one million mark for the first time last year, supported by steady economic growth and growing demand from Chinese families.

In 1995, Ford lost a bid to rival General Motors to build a sedan plant in Shanghai.

Although GM had to wade through the realms of bureaucracy before the $1.5 billion project began to roll out cars in 1998, Shanghai GM is now China's third largest car plant and ran at full capacity of 100,000 cars last year.

It launched the popular Sail compact in 2001 and saw sales more than double to 55,000 in 2002.

Analysts said, however, it was still not too late for Ford to join the car battle in China, as auto sales are forecast to continue to rise steadily. China had only 1.5 cars per 1,000 people in 2001, far below the global average of more than 90.

"Even if the growth rate in the coming five years drops to 15 percent on average, that is not small compared with other countries," said Yale Zhang, an analyst at Automotive Resources Asia in Beijing.

"Ford has been competing with everybody in the international market. I think there will be no difference in China."

Ford, which also owns 29.96 percent of light truck and minivan maker Jiangling Motors Co, has said emerging markets, including China, held out the biggest promise of future growth for the auto business.