Ten Trends to Watch for - Ford Industry

Over the course of the last decade, one has observed an increasing economic growth and market size in Asian economies. This economic growth has largely been powered by nations such as China and India. The Asian economies continued to grow even in the wake of the financial crisis. The article selected to analyze the impact of this trend is about the Ford Motor company expanding operations in China and increasing investments there. The article appeared in Wall Street Journal on the 22nd of November, 2012.

Ford Motor Company is one of the big players in the automotive industry. Recognizing the opportunities in China, the company has increased its dealer base by 4 times. It has also planned on introducing 15 new models of cars. Also it has partnered with local industries and is building five new plants to expand production. It is also actively picking up stakes in local car companies. Ford is also actively investing in powertrains and engine facilities to achieve complete localization. It is also offering its luxury line of Lincoln cars to the increasing affluent population of China. This is due to the fact that China had overtaken the United States of America as the largest automotive market. In the wake of this development, this article will try to analyze the implications of Ford’s expansion into China at an operations level.

The ever increasing automotive market coupled with high customer expectations and developments in technology require companies to invest in supply chains. Ford is planning to introduce newer models of cars in China. For this it to be effective it needs a good parts supplier base. By the time Ford establishes its own manufacturing facilities and achieves maximum localization, it needs to satisfy the demand for parts from local suppliers. This can be a tricky issue as suppliers have to actively keep pace with technological developments and supply parts in tune with Ford’s expansion plans. Also training employees in Ford’s new plants can be an...