Ford Motor Co.’s share price up, announces a new brand in China, warns of overcapacity in Europe

The global revival on a standard world-wide range of vehicle models of Ford Motor Co. was referred in the industry as “One Ford plan”. The companys Chief Executive Officer – Mr. Alan Mulally said multiple times that nothing will stop Fords “laser focus” on the worlds markets, including in China.

However, the situation on the auto industry in China suggested that the company may announce plans to launch a new brand in cooperation with one of its partners in China – Chongqing Changan Automobile Co. According to some reports, plans for a new brand of sedan vehicles may be revealed by Ford Motor Co., which is considered a departure from its “One Ford plan”.

The cooperation between Ford and Changan started more than ten years ago. Recently, the auto maker has been benefiting by the joint ventures in a country, where the government is seeking to make its own auto brands stronger, which is the reason why it is putting some pressure on foreign car manufacturers.

Mr. Mulally also said that the car manufacturers in Europe have to reduce the amounts of vehicles made, due to the fact that excess capacity on the territory of the continent is still at dangerous levels. Alan Mulally said in an interview with the Financial Times, that capacity was not brought down to a sufficient level by the closure of several car plants in Europe.

As reported by the Financial Times, Mr. Mulally said: “It is not enough. I think that companies need to match their production to demand. If you do not match production to the real demand, it is going to be exacerbated on the way down, because then it all gets worse.”

The car sales on the European auto market increased by 7.4% over the first four months of the current financial year. On the other hand, analysts reported that heavy levels of discounting are bolstering the decreasing real remand on the continent, which is currently struggling with high unemployment and mild economic growth.

Ford Motor Co. was 0.69% up to close at 16.02 dollars per share on Friday, marking a one-year change of +8.32%. According to the information published on CNN Money, the 15 analysts offering 12-month price forecasts for Ford Motor Co. have a median target of 19.00, with a high estimate of 23.00 and a low estimate of 12.00. The median estimate represents a +18.60% increase from the last price of 16.02.