Ford, Toyota Post Strong China Sales

Topics:  Toyota, Ford Motor Company

Anthony Fontanelle
July 12, 2007

Ford Motor Co. and Toyota Motor Corp., two of the world's three largest auto makers, reported strong first-half sales in China's fast-growing market. As newcomers in China’s auto market, the sales performance was remarkable, analysts said. The performance is boosted by the launch of new product lines which are aimed at attracting more customers.

Toyota sold 212,000 vehicles during the period, up 77 percent from a year earlier, powered by strong demand for its Camry sedans, the best-selling car in the United States in eight of the past nine years.

Toyota, Japan’s largest automaker, rolled out its first China-made Camry in May 2006 from a new plant in the southern Chinese city of Guangzhou, to pull auto shoppers away from competing models such as Honda Motor Co.'s Accord. Sales of the Camry came to nearly 78,000 units, well on track to hit the full-year target of 150,000, or more than one-third of the Japanese automaker’s total China sales goal of 430,000 vehicles this year.

Ford said retail sales of its wholly owned brands in China increased 25 percent during the first half to 93,206 vehicles. Sales of the mid-sized Focus sedan, made by a joint venture between Ford, Mazda Motor Corp and Changan Automobile Co. Ltd., came to 55,676 units, up 66 percent from a year ago, the Dearborn automaker said in a statement.

There also was a soaring demand for luxury models in China, as its growing ranks of nouveau riche snapped up the latest premium models. Toyota sold 12,000 Lexus cars in the half-year, nearly matching the 13,000 sold in all of 2006 and well on track to meet its full-year 2007 target of 22,000.

Meanwhile, Ford's Premier Automotive Group, which includes Volvo, Jaguar and Land Rover brands, posted combined sales of 8,779 units, up 66 percent from a year earlier. Ford wheels seem to be swerving in the right lane to attain such rewarding gains.

Additionally, industry's global giants are investing a great deal to ramp up Chinese production capacity to amass a larger slice of the market, where total car sales increased 30 percent in the previous year to 5.18 million units.

Toyota, which gets six percent of the China auto market, completed construction in May of its third plant in Tianjin, increasing capacity at its venture with FAW and its subsidiary Tianjin FAW Xiali Automobile Co. to 420,000 units. The Japanese automaker also is in talks about building a second plant at its venture in south China, which produces the Camry sedan.

Ford, which has less than a four percent share in China, is expanding a facility in the southwest city of Chongqing along with its partners. They are also building a plant in Nanjing, in eastern China. By the end of this year, it will boost its annual production capacity in China to 460,000 units, including 410,000 at Changan Ford Mazda and 50,000 at Jiangling Motors, in which the company holds a 30 percent stake.

In the United States, there’s a different ambiance. Despite more aggressive discounts, Ford on Tuesday reported lower sales for June, underscoring the drag from rising gas prices, weak housing market, and tight auto competition. The automaker's overall monthly sales, including sales into commercial fleets, were down eight percent, even if it eked out its first monthly gain in showroom sales since October.

Five of the six leading automakers offered bigger discounts in June than they did in May, according to Edmunds. GM was the exception. In a significant departure from usual practice, the three leading Japanese automakers increased their discounting in the face of slack demand, Edmunds said.

Source:  Amazines.com