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Ford (F) Unveils Next Phase of China Expansion Strategy

Zacks Equity Research

Ford Motor Company F has comprehensively designed its next round of expansion strategy for China. The automaker believes that the progress it has already made in China is just the beginning, as huge potential remains untapped in the country.

China, the world’s largest carmaker, is also the frontrunner in electric vehicles (EVs) and SUVs.

Ford’s China plan hinges on electric and connected vehicles, growth of SUVs, business structure streamlining and strong tie up with Chinese customers. The U.S auto giant intends to introduce more than 50 new Ford and Lincoln vehicles in China by 2025. The aim is to give more emphasis on SUVs and EVs.

In a bid to strengthen ties with its Chinese customers, the company intends to introduce five additional Ford and Lincoln models in China in 2019, leveraging on local supply. Again, in order to streamline its business structure, Ford plans to bolster ties with its joint ventures partner Changan.

Also, the automaker is planning to set up one distribution services division, which will look into the marketing and sales and services related to Ford vehicles sold in the world’s second largest economy.

Shares of Ford have outperformed the industry it belongs to over the past three months. The company’s shares have increased 9% compared with the industry’s rally of 3.5%.

Currently, Ford carries a Zacks Rank #3 (Hold).

A few better-ranked automobile stocks from the same space are Allison Transmission Holdings, Inc. ALSN, AB Volvo VLVLY and Wabco Holdings Inc. WBC. While Allison Transmission and Volvo sport a Zacks Rank #1 (Strong Buy), Wabco Holdings carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Allison Transmission has an expected long-term growth rate of 05%. Year to date, shares of the company have gained 22.5%.

Volvo has an expected long-term growth rate of 15%. Year to date, shares of the company have gained 64.1%.

Wabco Holdings has an expected long-term growth rate of 15%. Its shares have rallied 33%, year to date.

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