Bye-bye Brazil, Hello China?

Mulally hints Verve could be exported from China

By Igor Holas

09.24.2007

Last week Ford unveiled a concept of a new small car – the Ford Verve, the first of three upcoming small car concepts; Verve very closely indicates the future Ford small car. While we can simply call the new car “Fiesta 8,” there is an underlying significance to this model – it will be the first truly global Fiesta ever, and the first truly global Ford car since the 1999 Focus and 2000 Escape/Maverick.

Europe will be able to see their production version of the car in Geneva in spring, and will be able to buy the car as a three or five-door hatchback by this time next year. In US, we will see our concept (as five-door hatch) in January, and a production version will be revealed a year later. The car will begin production in April 2009 as a five-door hatch and a sedan.

Until now it was widely believed that the car will be built in the new Ford Brazil plant in Camaçari. This state-of-the-art production site has the ability to build some 10 models at the same time, has an excellent quality track record, and excellent union relationships. However, it is already running at capacity and it was unclear to observers how Ford would increase the output from this plant; regardless, there were no other obvious options.

All that changed yesterday. During a speech at the opening ceremony of a new development center in China, Alan Mulally, Ford CEO, clearly stated that not only will the new Verve be produced in a new just-opened Chinese plant, but that export is “a possibility.” He did not specify the direction of such shipments, but clearly stated that in the competitive world of global automakers, ignoring the export opportunity of Chinese manufacturing sites would be a mistake.

There is no further indication regarding this subject from inside Ford at this point, but given the Verve production in China begin in summer of 2008, given that the plant will assemble all three bodies of the Verve and given the capacity constraints of the Camaçari plant, I would not be surprised if Ford removed the Verve production from Brazil, and sourced all North and South American demand for the car from China. Camaçari would be retooled exclusively for the EcoSport and the upcoming “B-Max” sub-compact MPV car, both of which will be sold all across North and South America. Autosavant has covered how the Chinese are gaining “side door” access to US market, and it seems this trend is just gaining momentum.

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Author: Brendan Moore

Brendan Moore is a Principal Consultant with Cedar Point Consulting , a management consulting practice based in the Washington, DC area. He also manages Autosavant Consulting, a separate practice within Cedar Point Consulting. where he advises businesses connected to the auto industry. Cedar Point Consulting can be found at http://www.cedarpointconsulting.com.

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4 Comments

  1. China can absorb any manufacturing capacity the US car companies have. Something the UAW might want to bear in mind.

  2. As long as Ford engineers the car here or in Europe, I’m okay with Chinese production.

  3. wow this is a hot-looking car, i love it

  4. I agree w/ George W about Chinese production. As long as someone else besides the Chinese engineers the car and the production line, I’m OK with the Chinese screwing it together.

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