Ford's leadership team studies China's auto industry for competitive edge

USA Today

4 hours ago

In late May, Ford Motor Co.'s executive leadership team went to China with an agenda: To study every aspect of how Chinese auto companies operate, then apply those learnings across Ford in its other markets.
The Dearborn, Michigan-based automaker has been studying China's car companies for years now; that's not new. But in recent years, Ford's leaders have intensified their examination of its Chinese rivals, viewing Chinese automakers as the top competition to learn from — and beat.
Ford CEO Jim Farley started taking his leadership team to Shanghai and other big markets in China a couple times a year starting about two years ago. The sojourns last about a week, said Mark Truby, Ford's chief communications officer who has been on a couple of the trips.
Truby said the team drives China-made vehicles, talks to the experts in China, studies the technology and the customer service all with the purpose of learning "with a humble approach" and to ensure Ford has the right partnerships and strategy to succeed.
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"It's not just a copy and paste because the markets are so different," Andrew Frick, Ford's president of Ford Blue and Model-e divisions, told investors on June 11. "China is different from the U.S., different from Europe, et cetera. What we're trying to do is really replicate the intellectual approach, the speed that they do business on, and learn from our (joint venture) partners and then transfer that knowledge to the company."
Ford's ultimate goal is to lead in every global market Ford is in, knowing that one day the Chinese will bring their cars to the United States. When they do, Ford has to be competitive if the 121-year-old automaker is to survive another century. Consider what Ford Vice Chair John Lawler recently told Wall Street analysts about the Chinese automakers.
"They're going to continue to be a force to be reckoned with, given their speed, their cost structure, their nimbleness and their ability to iterate very quickly," Lawler said at the Bernstein 41st Annual Strategic Decisions Conference in New York on May 28. "When they've established themselves, they'll be looking to come to the U.S. So is that five years? Ten years down the road? I don't know. But eventually, they'll come, just like the Japanese did and the Koreans did."
When China's automakers do enter this market, Lawler said, consumers will gravitate to the lowest cost, highest quality products, not caring if those products are made by a foreign rival.
"That's eventually going to happen," Lawler said.
China's growth to world dominance
Dan Ives, managing director of Wedbush Securities, applauds Ford's strategy to study China car companies.
"This is a smart move as the innovation and supply chain from BYD and other China automakers is stunning," Ives told the Detroit Free Press, part of the USA TODAY Network. "(CEO) Jim Farley and team using this as rebirth of Ford to expand globally is a smart pivot."
But Morningstar's autos analyst David Whiston warns that "everyone is a formidable competitor these days."
"The Chinese have come on strong and I suspect executives feel it's a matter of time before they are selling in the U.S.," Whiston said. "The Koreans are no longer the cheap bargain substitute brand they were 15-20 years ago. Then there's EV startups like Rivian and Lucid floating out there and continued premium competition from the German three and Porsche."
But China is now the largest new vehicle sales market in the world. A total of 31.4 million vehicles, including buses and trucks, were sold last year there, a 4.5% jump compared with a year earlier, the China Association of Automobile Manufacturers reported. Growth in sales outpaced production, which rose 3.7%. By comparison, about 16 million new vehicles were sold in the United States last year, up 2.7% from the previous year.
China has expanded in other markets, too. Exports of Chinese-made passenger cars soared nearly 20% in 2024, to about 5 million vehicles, according to an Associated Press report. Exports of what China calls 'new energy vehicles," which are battery electric vehicles, fuel-cell cars and plug-in hybrids, reached 1.28 million in 2024, a 6.7% increase from 2023.
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The U.S. government has a 100% tariff on China-made electric cars and the European Union also hit China-based EV makers with high tariffs, saying the Chinese automakers have benefited from unfair government subsidies. The tariffs have kept all Chinese-made cars from being sold in the States so far. But to say American automakers are not alarmed by the rapid expansion of the Chinese automakers around the world, would be an understatement.
"I would say it is pretty serious," Mike Wall, executive director of Automotive Analysis at S&P Global Mobility, said of the Chinese threat to U.S. car companies. "While the Chinese are not directly competing in the U.S. yet, I think there is an expectation that they eventually will be and for a global automaker like Ford (and others), the threat the Chinese present in other markets is already there."
Ford's use of China as an export hub
Ford and General Motors have both faced an increasingly tough market in China in recent years as Chinese automakers, including the giant BYD, and EV-leader Tesla, have dominated domestic sales there.
Both automakers have worked to reverse slumping sales in China. GM shut down facilities last year as it spent $5 billion to restructure there. Ford shifted focus to use the country as an export hub. Last year, Ford made $900 million in earnings before interest and taxes in China for the year and much of that was based on exports, Frick said.
"Take a vehicle like Territory with our JV partner. We are now exporting Territory all around the world," Frick said of the compact SUV Ford makes with Jiangling Motors Corp. "It's doing quite well in Mexico. Actually, in Mexico, Territory is now our best-selling vehicle. We sell more Territorys than we do F-150s in Mexico, where there's a big Chinese influence."
China automakers comprise about a third of all new vehicle sales in Mexico, he said. Frick, who made the comments at Deutsche Bank Global Auto Industry Conference 2025, said Ford's business in China is "very profitable business" and "it's capital light" because of Ford's joint ventures. Ford has partnerships with Changan Automobile, Jiangling Motors Corp. Group and Changan Ford New Energy.
"It's a really good, investable business there," Frick said.
The only vehicle Ford assembles in China and sells in the United States is the Lincoln Nautilus. It sold 36,544 Nautilus SUVs in the United States last year, a 50% increase from the prior year. Ford is still exporting the Nautilus to the States despite a new 25% U.S. tariff on all imported vehicles, Truby said.
Ford's learnings out of China so far
Frick noted that Ford has an edge on Chinese automakers with its Ford Pro business, its commercial vehicle division. Frick called it a "long-term advantage" for Ford because the Chinese are not investing in commercial vehicles and the subscription services to the extent Ford has. In April, Ford reported its Ford Pro Intelligence software platform has nearly 674,000 active subscriptions, based on end of first quarter estimates, up 20% year-over-year.
As to Ford's executive team's learnings out of its most recent visit to China, Frick provided a high-level outline to investors.
"Speed, the way they're integrating AI into their vehicles and into their customer experience and their digital experience is really impressive," Frick said. "How we leverage the learnings out of there, not only from the actual customer experience that they're going through, but the development plans, the processes, we're taking a lot of that knowledge and trying to transfer it."
He said Ford is also learning a lot from Chinese automakers' new energy vehicles, which he believes could help Ford best determine its future electrification strategy such as where the natural consumer demands for electric vehicles and other electrification technology will land.
"That will likely inform, plus or minus government subsidies and incentives, that will inform where natural customer demand may be in other parts of the world," Frick said. "So there's a lot to learn in China.'
Jamie L. LaReau is the senior autos writer who covers Ford Motor Co. for the Detroit Free Press. Contact Jamie at [e-mail]. Follow her on Twitter @jlareauan. To sign up for our autos newsletter. Become a subscriber.