Comments on: Ford’s dilemma: It has to sell more cars in places like India to survive but can it make a profit there?

By: dkchinabiker

dkchinabiker — Fri, 15 Jan 2010 04:09:59 +0000

Brucegolden-
Ford can survive in the Chinese market, but it will have to cut costs with the up and coming local market. BYD and Geely are vertically integrated. They understand the Chinese market. Volkswagen also understands the market. Joint ventures is the way to go. Volkswagen works with FAW, GM works with SGM, SIAC and other companies. This type of arrangement helps meet those type of costs, but Geely and BYD have more growth potential in the Chinese domestic market than a Ford or GM. Chery is an SOE and I think is still lost in not being able to launch programs on time and always give their suppliers unrealistic volumes. My money would be on BYD (BYDDF) or Geely (GELYF). BYD has the upper hand with its electrical battery technology and Warren Buffet as their partner.

By: brucegolden

brucegolden — Thu, 14 Jan 2010 19:24:41 +0000

Amtrend – you have not been to China – virtually all of the flat land where the populations is populated and/or in agriculture. The unpopulated areas are unpopulated for good reasons, no water, difficult terrain, ….
also very very small % of the population actually has sufficient earnings to afford even the low cost automobiles available or the fuel and maintenance required – Chinese do have remarkable good mass transist – even out in the boonies.

By: amtrend10

amtrend10 — Thu, 14 Jan 2010 14:11:22 +0000

Presently the biggest cost cutting strategy would be to build the cars in China. Seems like lower costs would produce the same profits as any economic model. Mass transit only works in densly populated areas. Autos and trucks would allow the Chinese population to spread to the huge areas that are basically unpopulated. I guess you have to be as old as I to remember all the U.S. towns that had more cows than people.
I would advise the Chinese to be careful about rapid expansion but I’m sure they are not listening. Invest in China until their economic inflation eats them up. Keep a close eye. Remember what happened in the USA and Japan.

By: brucegolden

brucegolden — Thu, 14 Jan 2010 12:59:48 +0000

so I read ‘tween the lines that you believe it is really unlikely for Ford to compete profitably in that market and if can’t compete in that market, will not be a survivor?

By: dkchinabiker

dkchinabiker — Thu, 14 Jan 2010 08:14:05 +0000

We have roll over requirements for cars. Now when your car rolls over your curtain airbag needs to remain inflated for up to four seconds. We have what is called dual stage airbags (only in America). The airbag should be able to go off when you are resting against the steering wheel. Even the cigerette lighter has to stop functioning so the car doesn’t burn down if it gets stuck in the charge position. Capacity is one thing to consider. Product design is another. Just because you have access capacity for a particular cigerette lighter, airbag, or any component does not mean it can be used in emerging markets. The cost of safety and design of these componets could completely make them non competitive. To compete in emerging markets, these companies must throw out the book on safety written in the US and use cheaper less safe components, or expect these markets to pay a premium for their products.