Author: Zheng Wen, Zhou Changxian
In 2020, Ford achieved its goal of stopping the decline and rebounding in the Chinese market after three years of declining sales. And 2021 is undoubtedly a big year for Ford’s products.
What we see is a Ford that is gathering momentum for takeoff. This is certainly due to timely and appropriate strategic adjustments.
In the second half of 2018, Ford’s China business was upgraded to an independent business unit. Prior to this, the old Ford employee Chen Anning had returned to lead the overall situation of Ford China as the President and CEO of Ford China.
Half a year later, Chen Anning proposed the “Ford 2.0 Strategy” centered on “More Ford, More China” and the “330 Plan”. Over the next three years (2019-2021), more than 20 new models were launched in the Chinese market.
In Chen Anning’s view, Ford, a global industrial giant with a century-old history, can implement all of Ford’s strengths and advantages, such as technology, processes, talent, and global system capabilities, in the “More Ford” concept.
“More China” specifically refers to the market advantages brought about by China’s development and consumer upgrades in recent years, as well as the local resource advantages formed by Ford’s years of deep cultivation in China and its profound insight into changes in Chinese customer demands.
Thanks to the adjustments made in the past few years, both of Ford’s joint ventures in China and the Lincoln brand have achieved some success.
Taking Changan Ford as an example, both the average selling price and the quality of dealer operations have greatly improved.
The sales of Ford’s mid-to-high-end SUVs, including the Edge, Explorer, and Everest, have increased significantly, and combined with the good performance of the new Mondeo and Taurus, mid-to-high-end models account for more than half of NDSD’s sales volume nationwide. Sales of Ford models priced between 150,000 and 400,000 yuan have increased significantly.
More importantly, dealer financial profitability and health have increased significantly, with more than 75% of Ford’s dealer stores achieving profitability and positive ROI return rates on average.
After consolidating its solid foundation, Ford’s revitalization plan is still continuing… In 2021, Ford’s further mission is to create popular products and user operations. Continuously deepen localization under the execution of the “More Ford, More China” strategy.
Therefore, we have seen locally produced models like the Changan Ford’s new high-end mid-to-large-size SUV EVOS, Jiangling Ford’s mid-to-large-size SUV Lingyu 5-seat and 7-seat versions, the new mid-size SUV Lingrui, and Lincoln Z.“`markdown
However, Chen Anning believes that localization is not just about localizing car models. “Ford China 2.0” plan includes “Five Plans” and “Four Centers”. Localization not only refers to launching new car models, but also providing a series of intelligent services that are always available and all-round. We guarantee that there will be new highlights every year in the future.
In terms of electrification, we all know that Ford’s strategy is actually very aggressive, and All-in electrification is being promoted globally.
Last year, Ford proposed to achieve global carbon neutrality by 2050. By the end of 2025, the company will invest more than $30 billion in electrification business for research and development and production of electric vehicle models and battery technology. By 2030, pure electric vehicles are expected to account for 40% to 50% of Ford’s global sales, and the Lincoln brand will be completely transformed into a luxury electrification brand.
In terms of products, Ford took the lead in electrifying its three most representative models and launched the Mustang Mach-E pure electric SUV, F-150 Lightning pure electric pickup truck, and eTransit pure electric Transit commercial vehicle. These three models are the main models of Ford’s traditional advantages in segmented markets, fully demonstrating its All-in electrification determination and attitude.
“In China, we will not simply copy the approach in North America. We will accelerate the electrification based on the needs of Chinese consumers and the development trend of the Chinese electric vehicle market,” Chen Anning said.
“The times have changed, and Ford EV will become our new label. I fully agree.” But he revealed that the Mustang Mach-E is just the beginning, “behind it, we will have a series of electric vehicle products, and Ford China will also be All-in electrification like globally.”
“We have clearly stated that we will adopt a relatively independent operation mode for electric vehicles, and have launched the electric vehicle-exclusive brand Ford Select and laid out a direct sales network,” Chen Anning emphasized. Ford’s electric vehicle business is different from its fuel vehicle business in terms of brand, product, customer experience, and network.
At this point, his tone changed, “although electric vehicles have strong momentum in the overall business, at least more than half will still be fuel vehicles in the future. While seizing the new opportunities brought by electric vehicles, we also need to continue to do a good job in fuel vehicles.”
As the leader in the overall situation, Chen Anning must carefully consider how to balance the proportion of resources between electrification and fuel vehicle businesses. Obviously, this is also a common problem among joint venture brands.
“`## About Ford’s Two Joint Ventures in China
In fact, the strategic position of Jiangling Ford is becoming increasingly important, but people are not clear about how it works with Changan Ford.
“Overall, Changan Ford will still mainly focus on high-end or near-high-end models. Jiangling Ford’s passenger car products will be more popular and gradually form its own advantages and characteristics,” said Chenanning. For example, “The new mid-size SUV Ford Equator launched by Jiangling Ford, from product positioning, customer group, price range and other aspects, is not a simple replacement or competitive relationship with Changan Ford’s products.”
He said that Jiangling Ford is still mainly focused on commercial vehicles and has some passenger car models that share technologies with commercial vehicles, such as the off-road vehicle “Hanlu Zhe” and “Tourneo” etc..
However, from the perspective of Jiangling Ford’s mass-market positioning, there is still much room for growth, and its passenger car’s strategic position is not low.
Next, in the exchange with Jiangling Motors Corporation’s Vice President and General Manager of Jiangling Ford Passenger Car Marketing Company, Xiang Dongping, AutocarMax has gained a clearer understanding of Jiangling Ford’s positioning and future development.
“Jiangling Motor and Ford Motor have jointly established a joint venture company, which will further accelerate the expansion of passenger car business and accelerate the improvement of channel capabilities.” Xiang Dongping stated the original intention of the birth of Jiangling Ford Passenger Car.
In fact, the birth of Jiangling Ford Passenger Car has a sense of destiny, as the brand was born on the occasion of Ford’s brand release Ford+ strategy.
At the Guangzhou Auto Show, Xiang Dongping raised the question of the soul, “What role should Jiangling Ford be remembered by this era?”
He answered his own question, “There is a sentence in Ford’s corporate culture that everyone agrees with, “Compete like a challenger”. I think our role is a “challenger”.
In the past year, from 0 to 1, and then from 1 to 100, the young Jiangling Ford quickly built a complete product structure and channel system.
Xiang Dongping said, “Jiangling Ford’s organizational innovation and rapid development are rooted in Ford’s 2.0 strategy in China, and the five plans and four centers are making great progress. The product layout and technological upgrades have achieved great success, constantly confirming the strategic declaration of “More Ford, More China”.
It can be said that Jiangling Ford Passenger Car is tasked with the goal and mission of change, and they are indeed challengers who want to change and overturn themselves, and become the vanguard of Ford’s brand challenge and self-revolution. This is also an important decision for Ford’s brand, which has been rooted for a century, accumulated, and embraces change.Translated English Markdown text with HTML tags:
It’s interesting that Chen Anning also mentioned the concept of “Challenger” and believed that “this idea is very important, and I completely agree.”
“In the era of electric vehicle transformation, various opportunities and possibilities have emerged, and we are also learning through trial and error. Now we say internally that we want to play the role of ‘Challenger’ and not identify ourselves as a ‘century-old brand’ anymore. Making small mistakes is okay, and being a little late is not a big deal,” Chen Anning said with a smile.
Below is an excerpt from the media interview transcript:
Media: What functions does Ford China’s electric vehicle division mainly cover? What kind of accelerating posture can Ford quickly advance with? It feels to me that it’s too slow.
Chen Anning: I personally accept your criticism. Our speed is still not fast enough. The electric vehicle division currently has several hundred colleagues, mainly responsible for the planning and development of electric vehicles, as well as market, sales, direct sales networks, and user operations. The more than 2,000 people at the product development center in Nanjing are not all working on electric vehicles; they are also responsible for fuel-powered vehicles like EVOS, Lincoln Z, and others.
We have been building a brand-new direct sales system throughout this year. We are also one of the multinational brands that initiated direct sales ahead of others. At the same time, we are creating unique exclusive brands and customer experiences for the electric vehicle business, including launching dedicated APPs for electric vehicles.
Our approach in some areas is not entirely the same as that of local companies. International companies like Ford place more emphasis on brand and experience. Products are important, but not the only thing. Our new product development speed has greatly improved. For example, Lincoln Z, which was launched today, only took 36 months in the development cycle, and the launch speed is not slower than that of Chinese domestic auto companies. EVOS also had a relatively fast launch.
Ford hopes that when delivering products to customers, they will obtain excellent brand experiences. All preparation work in every phase must be done well so that products can be delivered responsibly to customers. In this regard, the speed of our business promotion is still quite fast. In one year, we have built the architecture from scratch, including online experiences, e-commerce, direct sales, experience stores, personnel, and training.
You may ask if we are in a hurry. Of course, we are. But I believe we have considered and taken responsibility for the brand and customers carefully. I think everyone can see that we are accelerating in the next one or two months, preparing to deliver vehicles before the end of the year. Hopefully, after the chip situation improves significantly next year, we can see an increase in production speed.
Media: Among all international brands that have started electric vehicle businesses in China, Ford is the one with the strongest determination for change in terms of operating models and organizational structures. Since Ford is committed to operating electric vehicles independently, it should strive for better localization.
Chen Anning: We take brand building seriously. If we were solely focused on sales, a simple solution would be to sell electric cars through traditional sales networks. However, the brand, reputation, and user experience would not be the same.
Two years ago, we decided to independently operate our electric vehicle business. After six months of planning, we took action and spent the past year preparing through brand building, network construction, and creating new experiences. It could have been done faster at China’s pace, but it was more important to persist on this path, rather than for short-term sales.
For example, what is Microsoft’s biggest change in the past few years? Embracing the era of intelligence, leaving the PC era behind, and entering the era of intelligence. This is a fundamental change.
As a car manufacturer with over 100 years of history, we need to embrace new industry trends and create new intelligent era. Our current task is to lead the entire company, brand, and even the entire industry into a new era of intelligence.
We will continue to accelerate. Our architecture, ideas, and strategies are correct, and there will be various small problems along the way. We are not afraid of problems and are constantly overcoming them.
This article is a translation by ChatGPT of a Chinese report from 42HOW. If you have any questions about it, please email email@example.com.