Ford's China expansion continues to accelerate

With growth accelerating at its various China business units, Ford Motor Company announced January 8 that it has delivered its strongest year to date in China, with year-on-year growth of 86.6 percent for the full year of 2006, outpacing the industry growth.

Ford Motor Company's affiliated brands, including Ford, Lincoln, Jaguar, Land Rover and Volvo Car, reported 2006 full year retail sales of 166,722 units, 77,360 units and 86.6 percent higher than 2005. Among them, Ford Brand cars and commercial vehicles, sold 155,404 units, posting 73,306 units and 89.3 percent increase from its 2005 sales.

"I am very pleased to see that 2006 turned out to be a year of accelerated business expansions and significant sales growth for Ford Motor Company in China," said Mei-Wei Cheng, chairman and CEO of Ford Motor (China) Ltd.

"China market is a critical part in our plans in building a stronger Ford Motor Company. By working closely with our partners, we laid out robust strategy to become one of the key auto players in the China market. The outstanding 2006 results clearly indicated that we are on the right track to achieve that goal," Cheng explained.

Changan Ford Mazda Automobile Company Ltd. (Changan Ford Mazda Automobile), Ford Motor Company's passenger-car joint venture in China, registered record retail sales of 129,790 units of Ford Brand vehicles, 68,768 units or 112.7 percent above the company's sales in 2005. The company is now one of the fastest-growing auto makers in the country.

Changan Ford Mazda Automobile also produces Mazda and Volvo Car Brand products, starting in 2006 in Chongqing. Changan Ford Mazda Automobile's new Nanjing assembly plant, with 160,000-unit initial production capacity, is scheduled to start production in the second half of 2007.

Ford Focus is this year's most significant product success of Changan Ford Mazda Automobile, with retail sales totaling 78,430 units, making it one of the top selling models in the C segment market. In single month of December, 13,955 units of Ford Focus were sold, setting a new single model monthly sales record for Changan Ford Mazda Automobile.

A total of 47,651 units of Ford Mondeo were sold in the China market in 2006, rising 15 percent from 2005. The 2007 Model Year Ford Mondeo hit Chinese dealer showrooms in November 2006 and has been receiving warm market response ever since.

Sales of Ford Transit, a commercial van produced by Ford Motor-invested Jiangling Motor Corporation, increased to 22,973 units, a 25.4 percent jump versus 2005, much higher than the commercial market growth rate. Ford Transit is leading the industry segment and being perceived by commercial vehicle owners as a brand of excellence.

China sales of Ford Motor Company's brands of luxury vehicles, including Jaguar, Land Rover and Volvo, both imported and locally produced, climbed to 10,914 units in 2006, rising by 4,073 units or 60 percent year-over-year. Volvo started local production of the S40 cars in July, 2006, which has contributed to the significant growth of Volvo cars in China.

The year 2006 also witnessed quick expansions of Ford Motor Company's operations in China.

"The company's $1 billion plus expansion plan, announced by Mr. Bill Ford in 2003, is about to be completed. Construction of Changan Ford Mazda Automobile's Nanjing plant and Changan Ford Mazda Engine Company are both coming along very well, and will start production in 2007. Overall, our core strategic operations are now in place to deliver a successful implementation of our China strategy," said Mei-Wei Cheng.

Bill Ford announced in October, 2003 that the company is to invest more than $1 billion, together with China partners, in expanding production capacity, building a new engine plant, introducing new products and grow ing the national dealer network.

In 2006, Ford Motor Company's business growth expanded beyond the 2003 announcement. Ford Automotive Finance (China) Ltd., or FAFC, now offers its dealer stock financing services to the dealers of Changan Ford Mazda Automobile and Jiangling Motor Corporation nationwide. By the end of 2006, in addition to the wholesale financing services covering over 100 Ford Brand authorized dealers, FAFC is offering retail financing service to end customers in 26 major cities across China.

Ford Motor Company's China Sourcing Office (CSO) sourced $2.6 billion worth of auto parts and systems from China in 2006, to support Ford Motor Company's global manufacturing operations and after sales customer services. China has become one of the key supply bases for the Company. CSO is working closely with suppliers in China to further enhance their product quality and technical capability, and to further expand the sourcing volume from China.

One of the latest business developments in China for Ford Motor is its research & engineering center in China, announced in November, 2006. This center with $27.5 million initial investment is to provide support to Ford Motor Company's product development in worldwide operations across all brands.

"Our product development, production, distribution and supporting operations are now well positioned and are moving full speed ahead," said Cheng. "Through introducing more new and attractive products Chinese consumers love to own, we are confident to outpace the industry growth again in 2007. Ford Motor Company is quickly approaching our goal in becoming one of the leading auto players in the China market."