(c) 2012, Bloomberg News.
SHANGHAI — Ford, lagging behind General Motors and Volkswagen in China, will add the Lincoln luxury brand to its lineup in the country as part of the company's biggest expansion push in half a century.
The luxury vehicles will be available in China in the second half of 2014, the Dearborn, Mich.-based carmaker said this week. The company will begin recruiting dealers for the marque in the fourth quarter of this year.
Ford follows GM in stepping up efforts to compete in China's luxury-vehicle market, a segment that researcher IHS Automotive forecasts will more than double and surpass the United States by the end of the decade. Volkswagen's Audi, Bayerische Motoren Werke and Daimler's Mercedes-Benz currently dominate, accounting for more than three-quarters of high-end cars sold in the country.
"The decision to bring a luxury brand to China is a bold decision but it's a necessary decision," said Bill Russo, a Beijing-based senior adviser at Booz & Co. "If you're a global company with global brands, you have to have global brands in China."
Ford is counting on China to help revive growth of its premium nameplate, which has seen deliveries tumble more than 60 percent since their peak two decades ago. Ford, which in 1922 bought the brand named after former U.S. president Abraham Lincoln, plans to unleash seven new Lincoln models, including the glass-roofed MKZ sedan, by 2015 as it seeks younger, wealthier customers.
"The neat thing is the recognition of Ford and Lincoln is very, very high" in China, Chief Executive Officer Alan Mulally said in a briefing in Beijing. "People have been following these vehicles for a long time. So now the real thing is to introduce the people to the specific vehicles."
He declined to say how much Ford will spend to bring and promote Lincoln. The automaker named Richard Baker as general manager for the Lincoln brand in China. Baker was deputy GM at Changan Ford Sales before the appointment.
Ford is introducing more models and building five factories in China, including a $760 million assembly plant in Hangzhou and a $600 million facility in Chongqing, to double its annual production capacity in the country to 1.2 million passenger vehicles. The expansion will help Ford increase global sales to about 8 million vehicles by mid-decade, up about 50 percent from 2010, according to the company.
Ford accounts for only 2.4 percent of China's light-vehicle market, versus VW's 19 percent and GM's 10 percent, according to data from industry researcher LMC Automotive.
Ford's share of the more lucrative luxury segment is practically nonexistent while Audi, BMW, and Mercedes-Benz have 76 percent, according to LMC. The German automakers have succeeded partly because they tailored their cars to Chinese consumer preferences, selling long wheelbase versions of traditional sedans to cater to the need for more legroom in the backseat.
GM, the biggest U.S. carmaker, is renewing a push for its Cadillac vehicles in China. In April, GM said it plans to bring in more Cadillac products, increase local production and sales outlets in China to boost sales five-fold and match U.S. deliveries by 2020.
Ford's Mulally wants to revitalize the aging Lincoln, which counts 65-year-olds as its average buyers. The brand's 85,643 vehicles sold in the United States last year was a 63 percent slide from its peak in 1990.
Ford plans to target Chinese consumers with more "individual and personalised motor cars" and bank on Lincoln's nearly 100-year-old heritage to expand sales, Jim Farley, the auto company's global marketing chief, said. "In China, the emerging luxury buyers are younger and fast-changing, and they have a strong desire to understand and appreciate the heritage of a brand."
(c) 2012, Bloomberg News.