Ford kicks off massive electrified drive in China

Ford Motor Co unveiled its first China-made plug-in hybrid last week in the first salvo of its electrification campaign, but a senior executive said its flagging China sales were unlikely to recover until more cars hit the market starting later this year.

The Mondeo Energi, produced at the joint venture Changan Ford, can drive up to 52 km on electricity and has fuel consumption of 2 liters per 100 kilometers.

Plug-in hybrids are a better option than electric cars in the current stage because the cost of batteries remains relatively high and the charging poles in the country are not readily in reach, said Nigel Harris, president of Changan Ford.

"You are not giving up ride comfort, you are not giving up acceleration, and you are gaining all of that fuel economy," he said of the Mondeo Energi.

"And it is also very important for us, because it starts to establish us in the new energy car market."

Late last year Ford announced that it will offer at least 15 electrified models in China by 2025, and all models at Changan Ford will have new energy car options by then.

Harris said the Mondeo Energi will help sales a little bit, but it will not generate high volumes to reverse Ford's lackluster China performance starting in 2017.

Ford sold less than 1.2 million cars last year, down 6 percent year-on-year. Of those 827,000 cars were from Changan Ford, which experienced a 14 percent fall.

The downturn has continued into this year.

In the first two months this year, Ford sold 123,473 cars, down 23 percent from the same period last year, while Changan Ford saw an even steeper 28 percent fall.

Harris said the fall has been the result of Ford's product cycles.

"We have had a pretty quiet period in the last 18 months, almost two years about products, and when over 60 percent of customers in the market are first time buyers, some of those customers always go for the most recent models."

Harris said he expected new growth when the joint venture unveils the all-new Focus later this year, which has been one of the best-selling models in China.

"New products always help. This is a market that loves new products," he said.

And more models are in the pipeline, Harris added. "Within three years, 75 percent of models in the showrooms will be new."

Harris said Ford's planned national distribution division, which will be built this year, will lend a helping hand as well.

The division - which will be part of Changan Ford - will be responsible for marketing, sales and services associated with all Ford-branded vehicles sold in China, to offer a simplified and consistent experience for customers, according to the company.

Ford is also exploring new ways to approach potential customers. Last Monday, it started a month-long event with e-commerce giant Alibaba to offer people opportunities to test drive Ford cars up to three days in Guangzhou, Guangdong province.

This is part of a partnership Ford and Alibaba signed in December 2017.

They plan to leverage artificial intelligence, cloud computing, and e-commerce to redefine the consumer journey and user experience for cars, the companies said.