Ford, bent on returning to the first camp of the joint venture, is readjusting its strategic layout in the Chinese market. Recently, Jiangling Ford Motor Technology (Shanghai) Co., Ltd. (hereinafter referred to as “Jiangling Ford Shanghai”) jointly invested by Ford and Jiangling was officially established.
According to the company’s data, the registered capital of Jiangling Ford Shanghai is 200 million yuan, and its business scope includes engineering and technical research and experimental development; Sales of automobiles, new energy vehicles, new energy vehicle electrical accessories, charging piles and other products. Shareholder information shows that the new company is jointly held by Jiangling Motors Corporation Ltd(000550) and Ford Motor Company, with shareholding ratios of 51% and 49% respectively.
Last September, Jiangling Motors Corporation Ltd(000550) announced that in order to improve the brand image of Ford brand vehicles produced by Jiangling Motors Corporation Ltd(000550) , establish excellent marketing ability and network, and improve customer satisfaction and brand value, the company plans to establish a joint venture with Ford. The company will mainly provide distribution services for Ford brand vehicles produced by Jiangling Motors Corporation Ltd(000550) , and can also operate through wholesale sales by dealers or direct sales by end customers. The establishment of Jiangling Ford Shanghai is the landing action of this announcement.
The establishment of a new joint venture with Jiangling is an important measure for Ford to seek to develop passenger cars. To this end, Jiangling Ford also hired Xiang Dongping, a marketing veteran who was once responsible for the sales business of Volkswagen, Volvo, Hyundai and other auto enterprises, as the general manager of the joint venture.
For a long time, Jiangling Motors Corporation Ltd(000550) takes commercial vehicles as its main business, and the passenger vehicle products released in recent two years are mainly SUVs. For Jiangling Motors Corporation Ltd(000550) , although Jiangling Motors Corporation Ltd(000550) has experienced the defeat of Yusheng, a passenger car brand, and has put forward a plan to focus on commercial vehicle business, it has always wanted to make achievements in the field of passenger vehicles, and joining hands with Ford is an important breakthrough. For Ford, how to regain the attention of Chinese consumers through more new products and services is an urgent problem to be solved
break the pattern of “one business and one ride”
Ford’s cooperation with Jiangling began as early as 27 years ago. In 1995, Jiangling Motors Corporation Ltd(000550) was the first in China to introduce its strategic partner Ford Motor in the form of ADRs distribution. After Ford purchased the additional B shares issued by Jiangling Motors Corporation Ltd(000550) for us $40 million, it accounted for 20% of the total share capital (now its shareholding has increased to 32%).
After Ford became a shareholder, the two sides launched a series of cooperation in automotive technology. Two years later, Jiangling Motors Corporation Ltd(000550) and Ford officially launched China’s first Sino foreign jointly developed car Quanshun. Since then, Jiangling Ford has established the development direction focusing on light trucks and light buses.
In 2001, Ford jointly Chongqing Changan Automobile Company Limited(000625) established the second joint venture Changan Ford. Ford’s layout in China has officially formed a pattern of “one business and one passenger”: Jiangling Ford focuses on the commercial vehicle market and Chang\’an Ford focuses on the passenger vehicle market. The two complement each other, allowing Ford to enjoy a lot of dividends in the incremental period of China’s auto market.
During this period, Jiangling Motors Corporation Ltd(000550) also tried to build its own passenger car brand. In 2010, Yusheng, the independent brand of Jiangling Motors Corporation Ltd(000550) , was listed, becoming the pioneer of Jiangling Motors Corporation Ltd(000550) in developing passenger cars. However, Yusheng’s performance after listing is not satisfactory. From 2012 to 2014, when Jiangling Motors Corporation Ltd(000550) separately disclosed the sales of Yusheng brand SUVs, the annual sales of Yusheng SUVs were 8000, 14200 and 26700 respectively.
Facing the rise of China’s SUV market, Ford no longer adhered to the pattern of “one business and one passenger”, and began to export passenger cars to Jiangling Ford. In 2014, Jiangling Motors Corporation Ltd(000550) released Ford roadbreaker (an off-road SUV). But at that time, the off-road wind did not rise in the Chinese market, and its price of 300000 did not stir up many ripples in the market.
In 2016, JMC successively launched Ford Turro Europe (MPV), Yusheng s3302 and SUV in 2018. However, it still failed to show its head in the passenger car market. In the annual sales volume disclosed from Jiangling Motors Corporation Ltd(000550) 2015 to 2020, the total annual sales volume of Yusheng brand SUV and Ford brand SUV is only 36200. In the same period (except 2020, when the statistical caliber changed), the sales volume of Ford Quanshun brand commercial vehicles was not stable, showing an overall upward trend and then downward trend, with an average annual sales volume of 57400 vehicles.
However, compared with Changan Ford’s sales volume falling from more than 900000 to more than 200000, the sales performance of Ford Quanshun brand commercial vehicles is fairly stable. During the same period, although the sales volume of Chang\’an’s independent brands declined, it remained at about 1.5 million vehicles per year. Moreover, due to the sharp decline in the sales volume of joint venture brands, the overall sales volume of Chang\’an independent brands continued to rise to 75%. “As we all know, Chang\’an is now focusing on its own brand. In the future, we can imagine that Ford will inject more passenger car models into Jiangling Ford, which is more conducive to Ford’s trade-off and balance in the two joint ventures.” Zhang Junyi, director partner of Aowei consulting and auto industry analyst, believes that.
After combing, the reporter of the Economic Observer found that Jiangling Ford’s action to expand passenger cars began in October 2020. In the same month, Jiangling Ford passenger car business officially launched dealer recruitment; In December, Jiangling Ford passenger car marketing company was established; In March 2021, Jiangling Ford’s new passenger car sales channel familyspace · Ford experience store appeared; In April, Jiangling Ford Lingyu went public; In September, JMC and Ford announced that they would establish a new joint venture; In November, Ford Lingrui officially appeared at Guangzhou auto show.
Behind a series of actions, the outside world can clearly see that Ford is accelerating to break the original pattern of “one business and one ride” and wants to support Jiangling Ford’s “upper position”
Ford moves forward cautiously in China
Ford Motor released the “Ford China 2.0 strategy” in 2019, proposed to improve its performance in the Chinese market in a more localized way of “more Ford, more China”, put forward the product 330 plan, that is, the plan to release 30 new cars in the next three years, and proposed to set up new institutions such as innovation center, R & D center, design center and new energy center, Promote the revitalization of Ford brand in the Chinese market.
With the development of Jiangling Ford’s passenger car plan, Ford’s passenger car business in the Chinese market has been divided into four parts, namely Changan Ford, Jiangling Ford, Ford electric vehicle and luxury brand Lincoln.
From the perspective of Changan Ford, its sales volume has rebounded to about 270000 in the first 11 months of this year and is gradually recovering. Not long ago, on December 26, Ford’s heavy-duty pure electric vehicle Mustang mach-e was officially delivered in the Chinese market. But the future performance of this car is still unknown.
Lincoln automobile entered the localization stage and sold 91600 vehicles in China in 2021, a year-on-year increase of 48%. On the whole, Ford needs a new entry point if it wants to further expand the market.
According to the sales express released by Jiangling Motors Corporation Ltd(000550) , the cumulative sales volume from January to November 2021 was 292896, with a year-on-year increase of 4.1%, including 47625 SUV models from January to November, with a year-on-year increase of 21.35%. In terms of sales volume structure, Jiangling Ford contributed nearly 20% to Jiangling shares. Among Ford’s major passenger car sectors, Jiangling Ford shows some signs of strong growth.
But will the expansion of Jiangling Ford’s business affect Chang\’an Ford? This issue has been concerned by the outside world. There is a view in the industry that Ford may import more products to Jiangling, and even the “dual vehicle strategy” models similar to Changan Ford are not excluded. At present, Jiangling Ford has launched a number of SUVs and MPV models such as road shaker, Lingjie, Lingjie s, Lingyu, Lingrui and turuiou.
Xiang Dongping said in a recent media interview that next, Jiangling Ford should focus on building two segments of SUV and pickup truck, and realize the new four modernizations of “specialization, differentiation, personalization and youth”. Among them, differentiation refers to the differentiation in the dissemination of products and services; Personalization is to make a distinctive brand, strengthen the brand construction of Jiangling Ford passenger car, and hope to create a culture matching SUV, off-road and pickup truck products; Youth is to innovate, break through and subvert in order to better meet the needs of young people. “In fact, this is a relationship of internal competition and cooperation. In fact, Ford’s job is to play a game with Chang\’an. If Ford cooperates very well with Chang\’an, it doesn\’t need to establish a new joint venture.”. In Zhang Junyi’s view, Ford’s move is also a helpless move.
In fact, Ford is still cautious in expanding passenger cars. This is mainly reflected in the investment scale and ownership structure of Jiangling Ford Shanghai. The registered capital of Jiangling Ford Shanghai is only 200 million, which shows that the joint venture is not a joint venture like Chang’an Ford in the traditional sense, and Jiangling Motors Corporation Ltd(000550) investment is slightly higher than that of Ford, and its company nature is more like a sales company.
Another person in the auto industry said that if Ford wants to start again, it must rely on some core models. In addition, whether Ford can develop in China depends on its investment and efforts in new energy. “Generally speaking, Ford still started relatively slowly”.
The constraints of the international environment, the rise of independent brands and the lack of new energy models are all testing Ford’s development in the Chinese market. Whether it can return to the first tier of joint venture brands by virtue of its joint venture with JMC Ford is also worthy of long-term attention.
(source: Economic Observer)
