Ford misses China market goal

Ford Motor Co. is making money in China and has touted its record sales there last year, up more than 25 percent over 2006. But internal company documents obtained by The Detroit News show the automaker missed its 2007 market share target, which means Ford is growing in China but not fast enough to catch up with its competitors.

The Dearborn automaker's rivals broke into the market earlier and have already established their brands among China's growing consumer class. With annual vehicle sales in the Asian nation expected to equal the United States within 10 years, Ford cannot afford to lose ground.

"It's critical because of the size of the market," said Mike Hanley, head of Ernst & Young LLP's global automotive industry group, who said vehicle sales in China grew by more than 20 percent last year. "The growth has just been staggering. That's why capturing a portion of that market share is so important."

Defining its brand remains a challenge for Ford in China. The company also is still struggling to build a local supply base — something it must do to take full advantage of the country's low labor costs. Ford's Focus compact became one of the 10 best-selling cars in the People's Republic last year, but the automaker's profit margins were slimmer than some of its competitors' because many of the parts used to build the Focus are still made outside China.

Ford says it is learning from marketing mistakes, convincing important suppliers to follow it to China and aggressively expanding its manufacturing capabilities in the country.

"We started out later, but we are really moving decisively and quickly," Ford CEO Alan Mulally said in an interview. More at Detroit News