Ford Motor (F, Financial) may be a late entrant in the Chinese auto market, but it sure isn’t a weak player. Compared to General Motors (GM, Financial) and Volkswagen (VLKAY, Financial), Ford is a much smaller player in the country, but its sales figures show huge upside potential for the auto major. With billions of dollars at disposal and aggressive expansion plans, Ford is taking China very seriously and the latest testament to that fact is its attempt to partner with Tencent Holdings so that it can integrate the latter’s WeChat messaging app in its cars. Car ownership in China is very low – less than 100 per 1,000 people – this presents a huge and unique opportunity to all car makers, and with WeChat, Ford seems to be all set to take a big bite out of it.
The Chinese auto market and Ford
China is the largest auto market in the world and reported 22 million vehicle sales last year. This figure is further expected to jump to 27.7 million by 2019. That’s something! General Motors and Volkswagen entered the market long ago and thus they have penetrated deep into it. But, Ford’s relatively late entry doesn’t mean the company is late to the party. Like I already mentioned, car ownership in China is extremely low and there’s massive growth potential. In fact, now the market is warming up to the idea of owning cars.
Ford, though a smaller player, enjoys great fan following in the geography. For the month of January 2015, Ford’s China sales were up by a whopping 19% year on year, compared with General Motors’ fall of 2.4% and Volkswagen’s fall of 2.8%. This clearly hints that the Chinese audience is finding Ford’s offerings to be hard to resist.
Striking the right chords
All this reminds of something that the legendary Steve Jobs once said – consumers don’t know what they want until you show it to them. For some, the idea of a messaging app integrated in an automobile being a key selection factor may sound absurd. But who are we to judge! If people are ready to buy it, why shouldn’t one produce it?
In the never ending battle for market share and sales, auto giants are resorting to things that were never seen before. Tech mammoths such as Google (GOOG, Financial) (GOOGL, Financial) and Apple (AAPL, Financial) are also making their way into the space, trying to make the most out of this untapped market. With so much going on, it becomes a must to think out of the box. WeChat is China’s most used messaging application that’s being used by more than half a billion active users every month. The app is used while driving, while working, while relaxing. The consumers have entered the world of connected devices and they want to stay connected all the time, even while driving.
With this technology in place, the users will just need to sync their handheld devices to their cars and control the app by certain predetermined functions, such as voice commands or usage of buttons, set by Tencent and approved by Ford. According to analysts closely following the space, for Chinese buyers, these additional features become the key deciding factor while buying a car. So, while some might find this unnecessary, it seems millions find it essential. If Ford is able to pull off this feature properly, there’s no telling what it can achieve in China.
