Ford Motor Company founded by Henry Ford, in 1903. In 1905 Ford Motor Company of Canada, Ltd. started operations, positioning Ford for the future globalization in the automotive markets. Ford has 13% of the world market and is “the second largest producer of cars and trucks, with active manufacturing, assembly or sales operations in the thirty countries”. Ford Motor Company’s global visioning continues to rank in the top of the automotive industry worldwide. This paper will explores Ford’s long term strategic planning in terms of global operations in China

A logical question is: why is Ford interested in China as a market and as a supplier base and, perhaps, why should China should be interested in Ford?
One fact is that, Ford is a global company. And the other fact is that China is the most populous nation on earth.

It is true that China remains a decade or so away from the type of high premium product that automakers market in Europe and North America, the fact remains that China is less than a decade away from becoming an automotive market that can compare in sheer size and volume to the European and North American mega-markets. And having a foothold in such a market can mean the difference between the survival and the diminishing role of an institution.

Ford Motor (China) Ltd. was established in October of 1995, almost nine years ago. Today, Ford has a 30% equity stake in Jiangling Motor Corporation, producing the Ford Transit. In 2001, Ford established a 50/50 joint venture with Changan Automobile Group. And build a four-door sedan based upon the Ford Fiesta, with more than 200 changes and improvements to meet the unique needs of the Chinese market. Today Ford Motor Company has sourced over $1 billion in parts and components from China.

For global automakers such as Ford, China is a given fact. While the Chinese market is primarily government and commercial vehicles, it has become clear to every global automaker that a significant portion of their future lies with China. Most automakers recognize, that building vehicles in the markets in which one sells them is a sound business practice. And in today’s collaborative automaker-supplier atmosphere, and in an age of global industry, turning to selected Chinese companies, and to selected global companies with Chinese holdings, for parts and components sourcing makes sense on both a local and an international level.

It is obvious, that access to high-quality/low-cost producers is tremendously important to all automakers involved in a global revitalization. China offers a tool that OEM can, will and is making great use of. As they are looking for world-class quality, a cost advantage delivered to assembly. China has a cost advantage at this time. The challenge for Chinese suppliers, and the supply tiers above and below them, will be to maintain that cost advantage. Low-cost producers tend to not remain the low-cost producers for a very long time.

Ford would like to bring Henry Ford’s vision and hypothesis to China which is “if he could create, among the working class, a middle class with the means with which to purchase his products, he would achieve higher product volumes and, through them, greater economies of scale and lower per-unit costs”. And with this the Chinese people will prosper and become a buying force on more of a level approaching that of the world’s mature markets. It is widely believed that, by trading with China today, foreign automakers plant the seeds for the markets by which they, and their workforces all over the world, will one day prosper. This speculation is based on the business models that have been followed in market after market. It is the business model that grew, in Eastern Europe in just a few short years.

Today China is seventh-largest market. The projections show that it can eclipse Italy for fourth place by 2006, and Germany for third place by 2011. To facilitate that growth, global automakers should invest with and trade with the companies that can help facilitate it. It’s the right and the smart thing to do.

Ford passenger vehicle dealerships in China were increased from 17 to 26 by mid-2003. Jaguar, Land Rover and Volvo also sell vehicles in China through a growing distribution network. Mazda, which is partly owned by Ford, also is growing in China, with contract assembly of vehicles and sales through an expanding network of Mazda dealers.

As with any investment, stakeholders expect that Ford will respect the environment and human rights in China. In Their own operations and those in which Ford have a controlling interest, The facilities will conform to ISO 14001, comply with all applicable laws and apply our own policies and standards. For suppliers, Ford use contractual agreements and Q1 standards to require certification to ISO 14001. For other business partners, including affiliates that Ford does not control, they are encouraged to implement policies similar to Ford.

Since 1995, Ford, and the Chinese Academy of Engineering have worked together to explore alternative fuel vehicles appropriate to China. Among the fuels researched was “naturalgen” fuel, a blend of natural gas and hydrogen. A prototype Ford Fiesta running on naturalgen was introduced in 2002. Another study with the Chinese Academy of Engineering identified issues that China should explore in developing its automotive industry, including infrastructure requirements, and pollution

Ford present efforts in China are focused in planning for long-term sustainable growth in China.