Ford launches the S-Max in China

SHANGHAI -- Ford Motor Co. launched the S-Max crossover in China on Thursday, March 15, entering a small but important segment.

Ford will assemble the S-Max at Changan Ford Mazda Automobile Co., its joint venture in the southwest China city of Chongqing. Ford aims to sell as many as 10,000 units this year, says Thomas Yao, Changan Ford Mazda spokesman. Sales goals for 2008 haven't been determined, he says.

The multipurpose vehicle segment in China, which includes crossovers, grew by 20.0 percent in 2006 compared with 2005, to 142,614 units, according to Automotive Resources Asia, a consulting firm here. The entire market grew by 35.1 percent to 4.2 million.

But the multipurpose segment caters to small businesses, a fast-growing part of China's economy.

The S-Max should do OK in China, says Yale Zhang, director of emerging market vehicle forecasts for CSM Worldwide here.

"It is roomy and the style is impressive," he says. "It's streamlined. It's new."

Newness will be an important advantage of the S-Max over its main competitor, the Odyssey van produced at Guangzhou Honda Automobile Co.

Launching models is an important sales strategy in China, where they are generally hot sellers for at least a few months. The Odyssey in China was refreshed in December.

The price of the S-Max starts at 219,980 yuan, or $28,435 at current exchange rates, making it slightly less expensive than the Odyssey, which starts at 248,000 yuan ($32,000).

The S-Max in China has other uses besides entering a segment here. Ford is looking to boost the volume of parts purchased from China. Suppliers to the domestically produced S-Max potentially could supply the plant in Genk, Belgium, where the crossover also is assembled.