Ford Motor Company (F): The Automaker’s New Engine Is All About Winning in China

Why? In China, new cars with engines of 1.5 liters or less get a tax break. It’s only about $300, but it’s something of a big deal in the super-competitive Chinese car market.

Ford is in the process of a huge ramp-up in China, making up for lost time in a market where rival General Motors Company (NYSE:GM) has a huge presence. The company has spent over $5 billion on factories and engineering centers in the region, and has begun rolling out models from its well-regarded global lineup.

The first of those, the Focus compact, was launched last spring – and has been a big hit in China, which helped the Focus become the world’s best-selling car in 2012.

The second, the Kuga (a twin of the Escape SUV), was just launched and is already posting good sales numbers amid huge sales gains for the Ford brand in China.

Ford clearly wants to give its next entry, the Mondeo, every advantage it can to help keep those big sales gains coming. That’s why it’s getting the new 1.5-liter engine. Meanwhile, the Fusion’s sales gains in the U.S. are why the Mondeo’s sibling will also be getting the new engine.

The fact that the new engine should improve the Fusion’s gas-mileage numbers a bit, giving it an edge in the hyper-competitive sedan wars? Icing on the cake.

The article Ford’s New Engine Is All About Winning in China originally appeared on Fool.com.

Motley Fool contributor John Rosevear owns shares of Ford and General Motors. Follow him on Twitter at @jrosevear. The Motley Fool recommends Ford and General Motors. The Motley Fool owns shares of Ford.

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