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Ford's Asian operations overtaking Europe, U.S.

Posting in Energy

Ford's Asian operations are surpassing its home country's output one century after its launch

Henry Ford's namesake company is on the verge of producing more vehicles in Asia than the rest of the world one century after he opened its first assembly line.

Bloomberg's Craig Trudell is today reported that Ford is manufacturing more cars in China and the rest of Asia than in Europe. The capacity of its Asian operations will eclipse North American as soon as 2015, it says. Ford executive Joe Hinrich compared Asia's enthusiasm for cars to the U.S. automotive industry's early days.

"It's the freedom that comes from the ability to own your own transportation that's never been had in your family. That's what it was like 100 years ago here," Hinrich told Bloomberg. Bloomberg noted that Morgan Stanley valued Ford's Asian operations at US$15 billion, which constitutes 20 percent of its market valuation.

Consequently, Asia has overtaken both the U.S. and Europe in its demand for oil. Cars have become something of a status symbol for families in Asian metropolises.

Chinese auto companies are also going in the reverse direction back to Michigan, where Ford first opened its assembly lines on  Dec. 1, 1913. Chinese firms are investing in Detroit's parts suppliers and engineering groups to capture industry mindshare, and are taking care to avoid a domestic backlash against foreign cars.

U.S. battery maker A123 Systems is a prime example of this trend. A Chinese auto parts company called Wanxiang Group now owns A123, a one-time recipient of several hundred million dollars in U.S. government funds to finance the development of electric car technologies. Wanxiang helped it avoid bankruptcy.

In May, the New York Times reported that Chinese firms are pursuing direct relationships with U.S automakers. Chinese companies sell billions of aftermarket products into the U.S. marketplace, but are far less likely to directly supply the Big Three. That's changing as major components are now being made in China.

Today's world is very different from Henry Ford's.

(image credit: The Henry Ford collection and Ford Motor Company)

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— By on September 25, 2013, 11:55 AM PST

David Worthington

Contributing Editor

David Worthington has written for BetaNews, eWeek, PC World, Technologizer and ZDNet. Formerly, he was a senior editor at SD Times. He holds a business degree from Temple University. He is based in New York. Follow him on Twitter. Disclosure