Ford Motor Company (F): This Automaker Has Big Plans in China

Ford is not the only one to showcase new cars in China. Volkswagen AG (ADR) (PINK:VLKAY) will bring new sedans and compact SUVs and increase its annual production to 4 million units by 2018. Meanwhile, General Motors Company (NYSE:GM) will get into a complete product offensive and launch at least 10 new or revamped models every year through 2016. It is aiming to attain production capacity of 5 million units by that time.

Huge investments

Ford Motor Company (NYSE:F) will invest $4.9 billion through 2015 in doubling its production capacity to approximately 1.6 million vehicles and fulfilling its commitment toward the “15 by 15” plan. The company will also build a new engine production facility with its commercial joint venture partner, Jiangling Motors. It has just opened a $500- million plant for making 1-liter and 1.5-liter engines for passenger cars with its other partner, Changan.

Big dollars are tied to China by automakers from all over the world, companies that are preparing to meet the explosive demand that the country is likely to see from the rise of the middle class. By Ford’s estimates, we are talking about 1 billion people who would be able to afford cars by 2020.

General Motors Company (NYSE:GM) will invest $11 billion by 2016 and build four new plants, including a $1.3 billion Cadillac plant. Volkswagen AG (ADR) (PINK:VLKAY) is looking at putting in $12.8 billion by 2015 and building seven more plants to add to its existing tally of 12 in the country.

Last word

If Ford Motor Company (NYSE:F) can execute its plan in China, it can add billions of dollars to its bottom line. Its vehicles are already well accepted in China. With new models making their debut over the next few years, it is a calculated guess that demand for the Blue Oval nameplate will remain strong, which would be an added catalyst for the stock. This makes Ford a good option for long-term investors who are looking for some solid growth.

The article This Automaker Has Big Plans in China originally appeared on Fool.com and is written by Gaurav Basu.

Gaurav Basu has no position in any stocks mentioned. The Motley Fool recommends Ford and General Motors Company (NYSE:GM). The Motley Fool owns shares of Ford Motor Company (NYSE:F). Gaurav is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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