Ford sees profit in China after expansion push

In 2006, as China's automobile market was fast becoming the juggernaut that by 2009 would overtake the United States in vehicle sales, Ford Motor Co executives were spending only 10 percent of their time working on Asia.

Now, China and the rest of Asia take up 35 to 40 percent of weekly meetings of Ford's top executives, many hooked in by video conference from around the world.

"We're about at break-even and we're also at the height of our investment," said Alan Mulally, chief executive of Ford, of the company's profit margins in China.

The rising role of China is the central aspect of what is a transcendental moment in the company's history, Mulally and Chief Operating Officer Mark Fields said in an interview last week at Ford headquarters outside Detroit.

"This is one of the biggest transformations in business history," said Mulally, citing the shift of emphasis for a company that was sustaining big losses and mainly making large vehicles for the US market, to a profitable company that is truly global.

Ford lost $77 million last year in Asia, but turned a profit in the fourth quarter. Ford does not break out financial results for China only.

Mulally said the progress Ford has made in China was on the back of a limited lineup, but that is about to change, which has him encouraged about continuing to turn profits in China and Asia.

Ford this year is launching three sport utility vehicles in China, part of the company's plan to introduce 15 new or significantly refreshed vehicles in the world's biggest auto market by 2015.

Since 2006, Ford has invested $5 billion to expand in China and open five new plants, including three assembly plants, by 2015. It will double its 2012 production in China along with its joint venture partner Changan Automobile Co, to 1.56 million vehicles annually by 2015, including 1.2 million passenger cars.

The 67-year-old Ford chief said he is encouraged the company is starting to be profitable in China while "doing that with the biggest investment we have ever made. Now think about when the plants are in, just think about where those margins go."

Ford's vehicle sales rose 21 percent in 2012 in China, where industry sales rose only 4 percent. Ford sold 626,616 vehicles in China last year.