Should Ford go cheap in China?

MSN Money - Ford (F) has always taken the high road in China, offering pricier models and refusing to compete at the low end. That was a mistake.

Ford didn't get into China at all until 2002, nearly 10 years behind General Motors (GM) and decades behind Volkswagen (VLKAY), Bloomberg reports. And it just hasn't been able to make waves there since then.

Ford only has about 2.4% of China's light-vehicle market. Now, its problems there are being scrutinized closely as Ford has crashed and burned in Europe. Ford is expected to lose more than $1 billion in Europe this year. It absolutely needs to pick up the pace in China, because Ford can't be so dependent on the U.S. for its success. Ford got a reminder of that in July, when its sales in the U.S. came in below analyst expectations.

"In China, we decided -- and you can debate the intelligence of that decision -- not to offer a full range of products," Joe Hinrichs, Ford's top guy in Asia, told Bloomberg last week. "That's something we're changing."

Ford needs to change its pricing too. It sells the Fiesta subcompact in China, but the car costs 40% more than a similar car, the Chevrolet Sail, made by GM. It must lower prices to compete. Ford wants Asia to make up a third of its global sales by 2020.

This year, Volkswagen made five of China's 10 most popular passenger cars. GM had three and Ford and Hyundai each had one.