Ford Asia Pacific and Africa: Financial Health

Ford experienced strong sales and growth in many of our regional markets in 2012. The Asia Pacific and Africa (APA) region is our fastest-growing market, and we continue to invest in this region for further growth.

China will remain the largest car market in the world for the foreseeable future, and we estimate India will become the third-largest market in the world in the coming decade. By 2020, total annual vehicle sales in the Asia Pacific and Africa region will likely top 50 million vehicles (with some 30 million of them in China¹), and one in every three Ford vehicle sales globally will take place in the APA region. To keep pace with this enormous growth, we are building new plants and expanding existing ones, hiring workers, building our dealer networks and further developing our supply chain across China, India and Thailand. These actions will help us reach the goal of increasing worldwide sales to about 8 million vehicles per year by mid-decade.

Ford’s wholesale sales in the APA region were up 15 percent in 2012 compared to 2011, totaling 1.033 million units. Our overall market share for the region increased to 2.8 percent in 2012 from 2.7 percent in 2011.

We are investing more than $6.7 billion³ in the APA region. Our operations include the following:

Joint Venture Facilities

• Our joint venture Changan Ford Automobile (CAF) already operates two passenger car vehicle assembly plants in Chongqing. CAF has two more assembly plants under construction – Chongqing 3 and Hangzhou – and two powertrain plants under construction, including an engine and transmission plant.

• Our commercial vehicle joint venture, Jiangling Motors Corp. (JMC), is investing $300 million for an assembly plant in Nanchang, China, for Ford- and JMC-branded vehicles.

Ford-Owned Facilities

• We broke ground in 2011 on a $1 billion integrated manufacturing facility in Sanand, Gujarat, India. The new facility, which includes an assembly plant and an engine plant, will create 5,000 jobs and will initially be able to produce 240,000 vehicles and 270,000 engines per year, starting in 2015.

• In Thailand, we have invested $450 million in a new plant in Rayong province that builds the Focus for Thailand and other Asian markets.

• In early 2012, we announced we will be investing $142 million to build a new compact SUV – the EcoSport – at our plant in Chennai, India. We expect to roll out the first EcoSports in mid-2013 for Indian consumers.

• We have invested $72 million to increase production capacity at our Chennai engine plant.

Small cars account for 60 percent of APA industry sales volume and are anticipated to continue to benefit from favorable government policies. The Ford Focus was the best-selling nameplate in China in 2012. For the full year, sales of the Focus in China totaled 296,360 vehicles, more than any other domestically manufactured passenger car, according to industry consultancy IHS Automotive.

We anticipate further success with the introduction of the all-new EcoSport in 2013. The EcoSport is based on Ford’s global B-car platform, like the Fiesta, and was developed from a previous-generation model that has proved extremely popular in South America since its launch in 2003. The new EcoSport will be sold in more than 100 markets worldwide. It will initially be built in India, China, Thailand and Brazil.

At the same time, we know that our long-term success in these developing and revitalizing economies will depend on our offering new types of mobility solutions that are sustainable and tailored to the unique needs of these markets. Our Blueprint for Mobility is aimed at ensuring we do just that. During 2012, for example, we kicked off a novel project in the region of Chennai, where we have manufacturing operations. The project, called SUMURR (Sustainable Urban Mobility with Uncompromised Rural Reach), is using our vehicles and our technology to address critical social needs, such as maternal health care. The pilot program in the remote hills of rural India helped 41 pregnant women give birth to healthy babies.

For a discussion of our global economic impact and financial health, please see the Financial Health section, including a Focus on Asia and a case study on our joint venture expansion in Chongqing, and more about our SUMURR project.