Ford (F) is building five plants at the cost of $5 billion in an attempt to achieve 6% Chinese market share by 2015, doubling its current share, AP reports.
China, where only 5.8% of the population currently owns a car, is the world’s fastest growing automobile market. The number of cars and trucks purchased annually by the Chinese has increased from 2 million in 2000 to 19 million in 2012, and is expected to reach 30 million by 2020.
So far, 2013 has been Ford’s best ever year in China with 407,721 vehicles sold. Yet Ford still lags behind its competition. Volkswagen (VLKAY) and General Motors (GM) make a third of all cars sold in China; the latter company’s sales figures are quadruple those of Ford.
Ford’s lag can be attributed in part to the prices of its vehicles, which are exacerbated by a 25% import duty. Ford also conducts most of its research and development in Dearborn, Mich. where costs run steep. The company plans to increase its number of technical workers in Nanjing to 1,500, twice as many as it currently employs there.
Currently, 73% of Ford’s sales are in North America and Europe. However, the company lost $1.75 billion in Europe last year and is poised to lose an even greater amount in 2013.