A Long, Long Time Ago, In A Distant Galaxy, A Car Company Henry Ford Did Start

It is now just about 100 years ago when Henry Ford fired up his production lines in Detroit for the first time. Through the eons,...

It is now just about 100 years ago when Henry Ford fired up his production lines in Detroit for the first time. Through the eons, Ford has had to weather many a troubled times and had to suffer the ignominy of begging for federal aid to stave off bankruptcy during the 2007-2008 US economic collapse. Many of their traditional centres have suffered, with Ford’s Detroit operations in tatters and in other stalwart countries, like Australia, production ceased after a 90 year history of manufacturing Henry’s finest. Some 1500 jobs were made redundant in the process.

Almost bankrupt a decade ago due to its reliance on selling big trucks and SUVs in the US, the second largest auto manufacturer in the US is now focusing on making small to mid sized cars at a profit and selling them across the globe. Perhaps the most startling change though has been where those vehicles are being made. No prizes for guessing that there has been a massive production shift to Asia.

Ford could be accused of being Johnny come lately in Asia, but they seem determined to make up for it and, for the first time ever, the number of Ford vehicles assembled in China and the rest of Asia outnumbers those built in Europe. But why stop there? Joe Henrichs, President of Ford Asia Pacific, whilst opening a new production plant in Thailand said, “The opening of this new world class facility is the latest example of our aggressive growth plan for this region and it represents Fords largest industrial expansion in half a century.” 

The new facility at Rayong, Thailand costs USD450 million and is described as a state of the art manufacturing plant. It will add some 150 000 car capacity to Ford Thailand, bringing the total to 445 000 and a combined total investment of USD2.5 billion in the Kingdom. The first vehicle that will come off the line will be the all new Focus for ASEAN, New Zealand and Australia.

Ford Motor Co in Thailand will now be able to manufacturer 8 times more vehicles than it sells in the Kingdom and it is thought that they will need help from the Thai government to ensure that the excess capacity does not become a liability as it did in Europe. Obviously Ford and the Thai government are relying on the ASEAN free market zone being implemented effectively in 2018 particularly when it comes to cars. By the middle of the decade, it is thought that Ford will have a capacity of some 2.9 million units; much of this will be in China but India is also seen as a major growth area.

Up to May 2013, North America still contributed the bulk of Ford's net income, which grew 18.5% to USD1.23 billion in the April to June period. But Robert Shanks, Executive Vice President and Chief Financial Officer of Ford, noted that the rest of Ford's global regions broke even for the first time in 2 years, clawing their way back from a USD600 million loss in the first quarter. Asia was a drag on Ford's earnings for most of the last 2 years, but Ford's sales jumped 47% in China in the first 6 months of this year as Ford introduced popular new vehicles like the EcoSport and Kuga SUVs. Total industry sales grew 17% in China.

Ford has poured money into new factories and product development in Asia as it tries to catch up with rivals such as General Motors and Volkswagen, who appreciated the region's potential sooner. However, Japanese brands are still dominant with about 80% share of the market. Ford wants a third of its sales to come from Asia by 2020. Revenue was up 14% to UDS38.1 billion, beating analysts' forecasts of USD34.9 billion.

Watch out, here come the Yanks……again.


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