Ford Motor Co.
) announced that has raised its stake in Chinese light commercial
vehicles joint venture, Jiangling Motors Corp., to 31.5% from
30.0%. The Detroit-based automaker purchased 13.0 million Hong
Kong dollar-denominated B-shares of Jiangling Motors, which
manufactures JMC light trucks, SUVs, and Ford Transit van in
After the purchase, Ford's stake in the joint venture went up to
$705 million. The company is also looking forward to raise its
stake in the joint venture further by 0.5% to 32.0% - the maximum
limit allowed by the securities regulator - within a year.
Ford continues to post robust sales growth in China. Last month,
the automaker posted a staggering 65% rise in sales to 81,387
Considering the first quarter of the year, Ford's sales went up
54% to 186,000 vehicles. In the same period, Jiangling sold
56,420 vehicles, up 7.1% from the year-ago period.
General Motors Company
) and its Chinese joint venture partners sold 290,538 vehicles in
the month, up 12.6% from March 2012. It was the company's
second-highest monthly sales ever recorded in China.
In the first quarter of the year, GM's sales increased 9.6% to
816,373 vehicles, overtaking
), led by burgeoning demand for its Buick lineups. Volkswagen
reported a 21% rise in sales to 770,000 vehicles in the same
Japanese automakers continued to be the losers due to the
political conflict between Beijing and Tokyo over disputed
islands in the East China Sea. Sales of Japanese brands,
Toyota Motor Corp.
), fell 17.8% during the month.
Overall passenger vehicle sales in China slowed down in March
compared to the first two months of the year, mainly due to the
stricter regulation imposed by the government on vehicle
ownership aimed at controlling increasing pollution and traffic
congestion in the country. According to the China Association of
Automobile Manufacturers (CAAM), passenger vehicle (cars,
multipurpose and sport- utility vehicles) sales rose 13.3% to
1.59 million units in March compared with a 19.5% increase in
Jan-Feb this year.
Passenger vehicle sales grew 17.2% to 4.42 million units in the
first quarter of the year, which is higher than 7.1% growth
registered in 2012. Thanks to the steep discounts that kept
passenger vehicle sales at a higher level in the world's biggest
auto market. Total vehicle (passenger vehicles, buses and trucks)
sales grew 13.2% to 5.4 million units in the first three months
of the year compared with 4.3% to 19.3 million vehicles in 2012.
Ford has embarked upon an aggressive expansion plan in China that
includes plans to triple its lineup in China by introducing 15
models, including the Kuga small sport utility vehicle by 2015.
Currently, the company sells seven models in the country.
In order to develop the new models, Ford will build new plants
raising its capital spending to about $6 billion annually by
mid-decade from $4.3 billion in 2011. In order to keep pace with
the expansion, Ford also plans to double its workforce by hiring
1,200 employees by 2015.
Ford anticipates global sales to expand by 50% to 8 million
vehicles by 2015 given the potential growth in Asia, mainly China
and India; and rising demand for small cars. The automaker
anticipates small cars to account for 55% of the total sales by
2020 compared with 48% presently. One third of the small car
sales are expected to come from Asia.
Currently, shares of Ford retain a Zacks Rank #3 (Hold).
FORD MOTOR CO (F): Free Stock Analysis Report
GENERAL MOTORS (GM): Free Stock Analysis
TOYOTA MOTOR CP (TM): Free Stock Analysis
VOLKSWAGEN-ADR (VLKAY): Get Free Report
To read this article on Zacks.com click here.