Lincoln to Build Cars in China, in Pursuit of Cadillac, Fox Business
Lincoln to Build Cars in China, in Pursuit of Cadillac
Published March 13, two thousand seventeen Auto
two thousand seventeen Lincoln Continental ( The Lincoln Motor Co. )
SHANGHAI–Lincoln Motor Co. will begin building cars in China by late 2019, as it looks to better contest with German and U.S. rivals to build up a larger share of fast-rising request for luxury cars in the world’s fattest auto market.
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In doing so, Lincoln hopes to catch up with General Motors Co.’s (GM) Cadillac in jiggling off a somewhat stuffy photo back home to become a fashionable best-seller in China.
The Ford Motor Co. (F) unit said Monday that it would begin building Lincolns in the western Chinese city of Chongqing–where Ford already operates in partnership with local state-owned auto maker Changan Automobile Group Co.–by late 2019.
In January, Ford Chief Executive Mark Fields said the company was abandoning plans for a car plant in Mexico amid pressure from then-President elect Donald Trump for American firms to manufacture at home. In a latest address to Congress, Mr. Trump complained that the U.S. had lost “60,000 factories” to China.
However, a Ford spokeswoman said Monday that “Ford’s philosophy around the world is to build where we sell,” adding that Lincolns made in the U.S. would still be exported to China even after the fresh locally built sport-utility vehicle comes in the market. Ford declined to expose how many Lincolns it plans to produce in China.
The company sold 33,000 imported Lincolns in China in 2016, three times more than the year before, and local manufacturing would help the company to meet future request, the spokeswoman said. Ford sold a record 1.27 million vehicles in China last year.
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The German trio of Audi AG, BMW AG and Daimler AG-owned Mercedes-Benz has predominated China’s luxury-car market for years. Lately high-end Chinese buyers have sought out fresh alternatives, said Yale Zhang, managing director of Automotive Foresight, with brands such as Cadillac, Lincoln, Jaguar, Land Rover and Volvo among the prime beneficiaries.
Request for premium cars is growing 30% a year in China, he said–far outpacing the growth of the auto market in general, in which analysts expect sales to increase by around 3%-5% this year.
Cars imported to China incur a 25% tariff, making “local manufacturing a necessary step” for any auto maker wanting to sell in volume in a very price-sensitive market segment, said Mr. Zhang.
Imports would remain strong, he predicted, as they cater to an utterly wealthy market segment in which an imported car is considered a status symbol.
Imported Lincolns in China range in price from around $41,000 for an MKZ sedan to $143,000 for the top-end Navigator SUV.
Like Lincoln, Cadillac has also been loving a renaissance in China, with GM opening a 160,000-unit Cadillac plant in Shanghai last year.
GM’s China sales grew 7.1% last year, but Cadillac sales leaped 46% to 116,406 units. In January, it sold more Cadillacs in China than in the U.S. for the very first time in the company’s history.
In November, Volvo Cars holder Zhejiang Geely Holding Group Co. announced that the Swedish brand’s newest luxury vehicle, the S90, would be manufactured in China.
Lincoln’s budge to produce a fresh SUV specifically for China also reflects the popularity of SUVs there. SUV sales rose by more than a fifth in January and February from the previous year, according to the government-backed China Association of Automobile Manufacturers. Auto analysts said they expect SUVs to embark outselling sedans in China for the very first time this year.