Ford is in the Chinese market is facing a crisis, it is no secret.
· In FY17, Ford sold 1.2 million units in China, down 6% from the previous year.
· In January 2018, Ford sold nearly 76,000 retail units in China, down 18% year-on-year (compared with a 15% increase for General Motors in China.)
· On January 29, Ford Motor Company announced that Luo Guanhong, the chairman and chief executive of the Chinese company, formally resigned for personal reasons and immediately took effect. In August last year, Ford appointed Luo Guanhong as Chairman and Chief Executive Officer of China Business , This appointment effective on September 1, 2017, as of the current less than 5 months.
· The growth momentum of all brands (except Lincoln) has basically stopped and the relationship with Chinese partners has also become tense.
However, everything has not been out of control, and Ford executives can profoundly study the Chinese word 'crisis', which consists of two characters, 'dangerous' and 'mechanical.'
'Danger' means danger, 'opportunity' means opportunity, and negative and positive effects of anything co-exist.
In fact, Ford's crisis in the Chinese market contains the elements of danger and opportunities.
First of all, 'dangerous': Ford sales in China may sustain the decline of several months, the culprit is the product supply is aging, while the new models will not be able to fill up by the end of 2018.
Ford has enjoyed double-digit annual growth each year for the past six years, with sales in the China market doubled to 1.2 million vehicles between 2012 and 2016. However, sales have started to decline after 2017. However, the Chinese self-owned brands Geely and Great Wall have greatly increased their market share, and in 2017, Geely even surpassed that of Ford.
Ford's situation in China, the traditional reaction is to hold positions, waiting for the arrival of new models, like an armored army call support .This approach may have worked in the past, but the times have changed .China's market Competitors pose a real threat to Ford.
In order to regain the power, Ford must try bold new things.For Fortune, fortunately, China has provided fertile soil for trying out opportunities, and Ford has begun to create a new and different mode of operation.
Give two examples:
Electrification.Everyone was shocked when Ford announced a joint venture with Zhongtai to produce EVs.The new joint venture will start production of the first electric vehicle by the end of 2018 or 2019. China is the largest EV market in the world.According to China Automotive According to the statistics of the industrial associations, China's total production and sales in 2017 were 794,000 units and 777,000 units respectively, up 53.8% and 53.3% respectively over the previous year.
In fact, Ford has been looking for years of new joint venture partners in China before deciding to a joint venture with Zhongtai.
Peter Fleet, chairman of Ford Motor Company Asia Pacific and chairman and chief executive of Ford Motor Company Limited, said Ford could eventually convert the projected sales of electric vehicles to revenue. "China's electric car sales will be smaller than yours The imagination is even bigger, and the government has made it clear they want a huge global success for the electric car industry.
The "Long-term Development Plan for the Automobile Industry" formulated by the Ministry of Industry and Information Technology of the People's Republic of China clearly states that the annual output of new energy vehicles will reach 2 million by 2020 and the development target of 20% of new energy vehicles sold by total sales volume by 2025 .
Cooperation with technology giants.
In December last year, Ford Motor Company and Alibaba Group officially signed a three-year strategic cooperation. Both parties will carry out all-round cooperation to jointly promote the cooperation of ZhiNet in such fields as automotive, artificial intelligence, intelligent mobile services and digital marketing.
Ford will explore ways to reshape the automotive industry in China and around the world as well as collaborate with AliOS, Aliyun, Ali Mom and Lynx, etc. Ford's cooperation with Alibaba is important because it opens up direct channels for Chinese consumers as well Innovative ways to sell cars.
Here are two more promising areas for Ford:
Smart City: China's major cities are more congested. Drip is working closely with major cities to improve overall traffic flow and transport efficiency. Ford's new horn in the world - smart cars in smart cities - appears to be China Timely solutions to traffic problems.
Lincoln: Chinese consumers bought 2.3 million luxury cars in 2017. German carmakers Mercedes-Benz, BMW, Audi and Porsche have an 80% market share, but in 2017 Lincoln's sales were 11,000 units in 2015 Jumped to 55,000 vehicles in January 2018. In January 2018, the Lincoln brand sold more than 5,000 vehicles in China, up 7% over the same period of the previous year, but also had an increasing trend.
In the face of declining sales, it is correct for Ford to venture out to take risks.In the long run, electrification, sharing and direct distribution are the only ways to win in China.Ford needs to have an entirely different strategy in the Chinese market, Get into new areas of electrification, autopilot and smart city transport so you can go further.
The crisis always contains the seeds of opportunity, which Ford should know.