Cars

Ford eyes India, China to hit 50% growth target

(Agencies)
Updated: 2011-06-08 15:11

Lagging

In China, the world's largest auto market, Ford lags behind GM, Toyota Motor Corp, Volkswagen AG and Hyundai Motor Co and their respective Chinese joint ventures.

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Ford aims to double its dealer network in China by 2016, and adding 100 dealers this year.

The company plans to boost its production capacity in China to 1.1 million vehicles by 2012. That lags GM, which already produces more than 2.8 million vehicles a year in China and aims to grow production to 3.7 million by 2015.

The decision to focus on Asia in an obvious one, said Michelle Krebs, an analyst with Edmunds.com.

"That is where the growth is," Krebs said. "Whether they will meet their stretch goals, I'm not sure. They've got to get in there with products and plants because they have to ride that growth wave."

Paying down debt

The company's debt burden is a legacy of Chief Executive Alan Mulally's move to borrow $23.5 billion in late 2006 to fund his turnaround plan. That step, ahead of the recession and financial crisis, is widely credited with helping Ford to avoid bankruptcy, unlike its competitors GM and Chrysler, which is now managed by Italy's Fiat.

The three major credit ratings agencies have steadily raised Ford's rating in the past year. As it stands now, two agencies, Fitch Ratings and Moody's Investors Service, place Ford two notches below investment grade. Standard & Poor's has Ford three notches below investment grade.