Traverse City Record-Eagle

Business

July 10, 2013

Late to China, Ford aims to catch up

CHONGQING, China (AP) — Dave Schoch has one of the toughest jobs at Ford Motor Co.: catching the competition in the world’s biggest car market.

When Schoch (pronounced Shock) arrived in China 13 years ago, the government was building eight-lane freeways in major cities, but bicyclists and pedestrians still filled the streets. The Chinese were buying fewer than 2 million cars and trucks each year, a fraction of the 14.4 million sold in 2000 in the U.S.

When he returned to China last year, Schoch was stunned. The freeways were choked with cars, from inexpensive, Chinese-made Wuling minivans to Mercedes-Benz sedans. The red-hot Chinese economy had more than doubled annual wages, giving millions of people the money to buy a first vehicle or move up to a luxury brand.

“Things turned upside-down,” says Schoch, who was named head of Ford’s Asia Pacific operations in the fall. “You have to be here and experience it to believe what has happened in the last decade.”

Last year, Chinese consumers bought 19 million cars and trucks — 5 million more than consumers in the U.S. Ford’s share of those sales was just 3 percent. Years of corporate chaos and financial trouble slowed Ford’s entry into China as its rivals gained a foothold. Together, General Motors and Volkswagen control a third of China’s market.

But the race is far from over. China is still a country where just 58 out of every 1,000 people own cars. In the U.S., that number is closer to 800.

Every year, tens of millions of Chinese are reaching the income threshold they need to buy a car, Schoch says. Many analysts predict annual sales in China of 30 million by 2020, almost double the U.S. forecast of 17 million. It’s up to Schoch to ensure Ford gets a big chunk of that phenomenal growth.

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