Ford (NYSE:F) is continuing to show solid growth from Asian, as well as European markets. The European automobile market has been slow, due to the poor economic conditions prevailing in the region. However, the trend is changing and the companies are reporting an increase in sales of passenger, as well as commercial vehicles. The region is still far from completely out of the slump, and the market is expected to grow at a slow rate in the near future. However, the signs are good and the improving conditions in the region will certainly have a positive impact on the automobile sector.
Product differentiation, superior product quality and low costs have proved to be key factors allowing Ford to regain its place in the automobile industry. However, lower costs and superior product quality are somehow constrained by systemic barriers, which leave product differentiation as the most important aspect for increasing market share. Ford has substantially increased its products portfolio, in order to increase its market share in the existing and emerging markets, at the start of this year. The increased product launches in the current year managed to record impressive growth in the emerging markets, Europe and the world's largest automobile market, China. However, we have discussed the overall growth and Ford's position in China in detail in our previous article. Therefore, we will only discuss the current performance of the company in the Chinese market.
Ford recently reported its first-half results in the emerging markets, and continued to produce impressive growth figures in the region. Ford-China has crossed the half-million mark by the first half of the year, which is up almost 35% from last year. The company has sold around 549,256 vehicles in China, with 87,783 vehicles only in the month of June - up 17% compared to the same period last year. This is due to strong product growth, such as Ford Focus, Ford Kuga, Ford Mondeo and the Ford EcoSport, which increased the sales of the company substantially. China, the world's largest automobile market, demands safe, high-quality, fuel-efficient and technologically smart vehicles, which Ford successfully managed to provide over the last few quarters. Furthermore, the company's passenger cars joint venture, Changan Ford (CAF), also reported an impressive 39% increase in the first half of the year. Ford Focus and Ford Mondeo proved to be the leading passenger cars among the Ford product offerings in China, with a sales increase of around 9% and 124%, respectively.
Ford's commercial vehicle investment in China, Jiangling Motors Corporation (JMC), also reported its best first-half performance, delivering a 21% increase in the first six months and a 19% increase in June, compared to the same period last year. Further, the imported vehicles segment also reported impressive growth, showing an increase of around 70% in the first half. Ford's success in China will continue to follow an uptrend, as the company launched 88 new dealerships across China, increasing the total dealer count to 750. Moreover, as part of accelerated growth plan, it opened a $350 million transmission plant in Chongqing. This is the first transmission plant for Ford in the Asia-Pacific region, which will produce 400,000 units a year to help meet growing Chinese demand.
European sales increased by 6.6% in the first half and slightly outperformed the industry average of 6.3%. This is due to the company's highest first-half sales volume since 2011, which stood at around 605,400 vehicles in 20 traditional markets in Europe. Moreover, the pricing environment in the region remains extremely competitive, and the company managed to retain its market share at around 7.9% in the European market.
Ford has also managed to attain a competitive advantage by introducing its 1.0-litre EcoBoost advanced petrol engine, which was recently awarded the International Engine of the Year. The EcoBoost engine successfully managed to mark its third unprecedented year with increased sales in the European region. Ford initially launched this engine in Ford Fiesta. However, the company also plans to introduce it in a further nine vehicles in Europe. This will further increase Ford Fiesta sales, which is already one of the best-selling vehicles in the region.
Growth for Ford remains extremely strong from emerging markets, with China being the most attractive market. On the other hand, Europe is making a strong recovery, and the above-average sales growth of the company shows that it is meeting its robust growth targets in this region as well. We have maintained that Ford will be one of the best stocks during the current year, as the growth for the company remains strong from almost all the segments, which should result in solid growth in fundamentals, resulting in support for a rise in the stock price.
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