As US and European auto sales flounder in the wake of market saturation and an economic downturn, Asia has never been more important for car-makers looking to sustain their mature market losses.

John Parker is an old hand in Asia. He has worked throughout the continent since 1979 and now heads up Ford’s Asia-Pacific and Africa operations as executive vice-president. As well as rapid growth in China, India and the Association of South-east Asian Nations (Asean) region, he has seen Asia’s business environment change significantly over the past 30 years.

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“China, for example, has grown very rapidly over the past six or seven years but what surprises me is that people still don’t have a good understanding of the extent of the development or of the products those customers are looking for,” he says. “It is surprising because China is hardly an emerging market any more; with 10 million vehicles a year in production it is already bigger than any other market outside the US.”

Like all the major multinational car makers, Ford has followed the profit trail to China, with expansion plans including a $500m small-car plant in Nanjing. “There were a lot of challenges in moving into a greenfield location, starting with negotiations with the Nanjing government authorities and the state authorities,” says Mr Parker. “There were also the challenges of hiring a whole new group of Chinese nationals, as well as bringing on board an incremental supply base.”

Working with local suppliers brings a whole new set of issues in China, just as it does in the Asean region and India. “We work with a combination of transplanted international suppliers, alongside indigenous suppliers with more knowledge and expertise of the local scenario, and we try to blend the two,” says Mr Parker. “To a certain extent we need multinational suppliers to come with us because we can’t do all the work of improving and developing the indigenous supply base ourselves.”

Adequate scale

Ford has a specific strategy of ensuring that the products it brings into growing markets are on a large enough scale to adequately localise in the country. “So we’re looking at about 100,000 or 200,000 units and we look for a high level of local content,” he says.

But simply entering a new market is not the end of the challenge. Once operations are up and running, it is vital to pay attention to the core brand image and ensure the primary brand is being well developed, says Mr Parker.

“A strong product strategy in the major consumer growth segments is important and you have to ensure you have a capable dealer body that provides all the subsequent ownership experiences at a level that keeps bringing the customers back to you.”

Ford’s commitment to the region is demonstrated by the establishment of its regional headquarters in Bangkok, from which Mr Parker runs Asia-Pacific and Africa. It was headquartered out of Detroit for the past decade, and before that in Melbourne and Tokyo. “The Bangkok headquarters was established two years ago as a substantial amount of growth was taking place in Asia and we had a rapidly expanding portfolio of products and manufacturing sourcing footprint,” says Mr Parker.

The decision to locate in Bangkok was driven by Ford’s existing and significant manufacturing presence in Thailand with Auto Alliance Thailand, which manufactures products for both Mazda and Ford.

“And, of course, there’s nothing like being on the ground, making decisions in real time, which meant no longer working through a 12-hour time difference from Detroit,” says Mr Parker, who has no plans to end his 30-year sojourn on the continent any time soon.

COMPANY PROFILE:

FORD

Headquarters:

Detroit, Michigan, US

2007 company turnover: $172.46bn

Leading industry sector: Automotive components

Leading business activity: Manufacturing

Operations: 200 markets across six continents

Other brand names: Aston Martin, Ford, Jaguar, Land Rover, Lincoln, Mazda, Mercury and Volvo