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Ford Aims to Strengthen Hold in China via 5 Launches in 2018

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Per Reuters, Ford Motor Company (F - Free Report) launched five new vehicle models at an event in Chongqing, China. Expected to be available in showrooms by the end of 2018, the new models include hatchback and sedan versions of Focus ST-Line, Ford Focus and redesigned Ford Escort.

At present, Ford is grappling to restore sales in China, world’s leading auto market. In first two months of 2018, the company witnessed 23% decline in China sales. In order to regain sales, it has been launching new products. The recent launch is a fraction of its plan to introduce more than 50 recreated or new vehicles, including 15 electric cars, in China by 2025. During the same period, the company also aims to boost China revenues by 50% in comparison with the figure in 2017, via these new launches.

Per management, these new launches focus on the company’s commitment towards China’s midsize car market.

Ford Motor Company Price and Consensus

Ford’s new hatchback and sedan vehicles are going to hit marketplaces where consumers are demanding for spacious and multi-functional sport-utility vehicles (SUVs) and minivans. Currently, demand for these vehicles accounts for almost half of China's requirement for passenger vehicles.

Although, the requirement for SUVs are still soaring in China while sales growth of this type of vehicles has declined considerably to around 10% a year. Moreover, compact sedans still constitute 35% of overall passenger vehicle sales.

Price Performance

In the last six months, shares of Ford have outperformed the industry it belongs to. During the period, its stock has lost 5.5% compared with the industry’s decline of 10.4%.

Zacks Rank & Key Picks

Ford carries a Zacks Rank #3 (Hold). A few better-ranked stocks in the auto space are Tenneco Inc. (TEN - Free Report) , Toyota Motor Corporation (TM - Free Report) and Spartan Motors, Inc. , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Tenneco has expected long-term growth rate of 13.5%. Over a month, shares of the company have gained 4.7%.

Toyota has expected long-term growth rate of 6.1%. In the last six months, shares of the company have risen 4.1%.

Spartan Motors has expected long-term growth rate of 15%. Shares of the company have risen 13.6% over the last three months.

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