Ford in China : Partnerships and Electrification
Ford’s existence in Europe may have become less certain, its focus on the Chinese market is a sure thing. On Tuesday, April 10th, Ford presented 5 new models to the public in Chongqing, China, which is also where Ford’s joint venture partner Chang’an is based.
Ford took the opportunity to outline its strategy and its intention to play a major role in the Chinese automotive ecosystem.
Even for global players, doing business in China comes necessarily with partnerships and joint ventures. The strategic selection of these JVs is crucial for the brand’s success and will determine the brand’s ability to move into new technologies, such as EVs and mobility solutions.
Ford has clearly understood this and has established an interesting variety of partnerships. Here are some of them:
- Chang’an Ford: a 50/50 joint venture between Chongqing Changan Automobile Co. Ltd. and Ford Motor Company with 3 plants. It is Ford’s largest production outside Detroit
- JianglingFord: JMC or Jiangling Motors Corporation, producing vans and SUVs
- ZotyeFord: with the JV with China’s Anhui Zotye Automobile, Ford intents to build small EVs that are to be sold as a local brand and outside of the Ford badge. Zotye-Ford will also invest in mobility services and vehicle connectivity
- Alibaba: China’s “Amazon” and tech giant is cooperating with Ford for direct car sales through Alibaba’s online retail platform, Tmall. Ford has also used Alibaba’s big data to determine potential clients for testdrive sessions
- Velodyne LiDAR, a joint investment between Baidu and Ford: this JV develops detection technologies for autonomous cars
Ford will not be missing the EV revolution in China predicted to reach a volume of 1 million units in 2018. It has already announced that the 5 new models presented in Chongqing will be available in an electrified version.
Besides that, Ford has announced to launch 50 new or redesigned Ford/Lincoln vehicles by 2025, of which 15 will be electric.
Ford China’s CEO, Peter Fleet, is confident that the phase-out of the Chinese Government’s subsidies will not impact drastically the appetite for EVs: “As the incentives progressively come off, the cost of technology comes down.” Regardless of subsidies, Mr. Fleet is convinced that the premium driving experience of EVs, i.e. the silence and the performance, will be the major argument for the potential buyer.