Ford Motor Co. is looking to make hay overseas while General Motors and Toyota Motor Corp. regroup. It’ll invest about $3.5 billion in production plants in China, India, Brazil, Argentina and South Africa over the next five years.
The spending is part of a long-term strategy to focus on boosting production in foreign markets that now comprise about 54% of Ford’s annual worldwide sales of $120 billion or so. By decade’s end, overseas markets are likely to account for 60% or more of the company’s total sales, as the U.S. market for Ford autos pokes along and sales abroad go full steam.
In China -- the world’s biggest market -- around 14 million new vehicles will be sold this year. By 2020, up to 25 million new cars and trucks will hit the road there every year. Over the span, look for Ford to roughly double its current 1.9% market share in China.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Auto sales in India won’t be far behind China’s, so it’s no surprise that Ford has the two countries high on its list for new plants. It plans to spend around $500 million on new facilities in the two nations.
One new Ford production facility, just opened in India in February, will churn out a small car dubbed the Figo designed to appeal to the country’s millions of motorists. Look for the company to gain a firm foothold in a market where no automaker yet has a chokehold on sales.
The importance of building sales in fast growing markets isn’t lost on any automaker, but Ford is perhaps the best positioned financially to step up investments in production facilities. Thanks to a reorganization plan launched in 2006, the company made nearly $3 billion in net income in 2009 after it lost around $30 billion during the previous three years. Ford is likely to see far larger profits this year and next.
Worldwide sales are already paying dividends for Ford, but ramped-up production and sales will make it an even stronger competitor down the road, especially now that it has developed streamlined common parts and designs. “The ‘One Ford’ concept is allowing it to build vehicles that can be tailored to suit the tastes of different markets, but also take out huge amount of costs that instead can go to the bottom line,” says Rebecca Lindland, director of the automotive group at IHS Global Insight, a worldwide business consultancy.
-
I'm want to give my 3 grandkids $5K each for Christmas.You're comfortably retired and want to give your grandkids a big Christmas check, but their parents are worried they might spend it all. We ask the pros for help.
-
If You're Not Doing Roth Conversions, You Need to Read ThisRoth conversions and other Roth strategies can be complex, but don't dismiss these tax planning tools outright. They could really work for you and your heirs.
-
Could Traditional Retirement Expectations Be Killing Us?A retirement psychologist makes the case: A fulfilling retirement begins with a blueprint for living, rather than simply the accumulation of a large nest egg.
-
AI Appliances Aren’t Exciting Buyers…YetThe Kiplinger Letter Artificial intelligence is being embedded into all sorts of appliances. Now sellers need to get customers to care about AI-powered laundry.
-
10 Things You Should Know About Buying a Car Today, Even if You've Bought BeforeIf buying a car is on your to-do list, and it's been a while since you went shopping for a new one, this guide will help avoid any nasty shocks in the showroom.
-
Banks Are Sounding the Alarm About StablecoinsThe Kiplinger Letter The banking industry says stablecoins could have a negative impact on lending.
-
Get the Best Car Deal in Retirement: Here's the TrickPlanning on shopping for a new car this Labor Day weekend? Here’s how to haggle for a better price, even though you're retired.
-
Big Changes Are Ahead for Higher EdThe Kiplinger Letter A major reform of higher ed is underway. Colleges are bracing for abrupt change, financial headwinds and uncertainty.
-
What New Tariffs Mean for Car ShoppersThe Kiplinger Letter Car deals are growing scarcer. Meanwhile, tax credits for EVs are on the way out, but tax breaks for car loans are coming.
-
AI’s Rapid Rise Sparks New Cyber ThreatsThe Kiplinger Letter Cybersecurity professionals are racing to ward off AI threats while also using AI tools to shore up defenses.
-
Blue Collar Workers Add AI to Their ToolboxesThe Kiplinger Letter AI can’t fix a leak or install lighting, but more and more tradespeople are adopting artificial intelligence for back-office work and other tasks.
