Ford Motor Co sees most of its corporate sales growth over the next decade coming from the Asia Pacific region despite the recent slowdown in China auto demand, a top executive said Thursday.
“When I take a look at Ford’s growth over the next five to 10 years, we believe roughly 60 % of the growth will be in the Asia Pacific region,” said Dave Schoch, president of Ford’s Asia Pacific region.
Ford’s Asia Pacific sales in the first quarter totaled $2.3 billion, or 6.8 % of the company’s total.
China and India will be the big engines for growth, Schoch said. Ford sees China industry sales hitting 32 million vehicles in 2020, up from 23 million in 2013, and doubling to 6 million in India in the same period.
Schoch said Ford believes 7 % industry growth is sustainable in China despite the recent slowdown.
Ford, General Motors Co and Volkswagen have recently cut vehicle prices in China in response to the market. Ford’s Explorer SUV is now more than 8 % cheaper.
A slowing economy has weighed on domestic auto demand in China, leading to a 0.5 % drop in April sales, and foreign car makers are facing more intense competition from their Chinese rivals, especially with SUVs.
Ford’s April sales in China inched up 0.1 %.
Nevertheless, foreign automakers continue to pour money into factories in the world’s largest auto market.
Schoch affirmed comments made last month by Executive Chairman Bill Ford that the U.S. automaker would slow production if market demand dictates that. Schoch said the company took such actions in the first quarter, but noted that they were immaterial and declined to give details.
Ford’s joint venture with Chongqing Changan Automobile Co Ltd 000625.SZ said last month it would take over and upgrade a northeast China factory in a $1.1 billion deal that would increase Changan Ford’s annual China production by 200,000 vehicles next year. Schoch said Ford hopes to close that deal in about a month. That deal followed Ford’s March launch of a new factory in eastern China’s Hangzhou, with an annual capacity of 250,000 vehicles.
Ford also has grand ambitions for its luxury Lincoln brand in China, including plans to grow its dealership count from 14 now to 25 by year-end and 60 by the end of 2016, Schoch said.