Ford Motor Company – the recipient of a 2014 Chinese Quality of Corporate Integrity Award – earlier this month announced its largest recall in the country in four years. At issue is a fuel leak risk in Ford’s Focus sedan. Ford has agreed to replace the necessary parts free of charge.
In all, Ford will recall 191,700 Focus sedans. Some of the recalled models were built as far back as 2009. The recall was announced by China’s General Administration of Quality Supervision, Inspection and Quarantine, or AQSIQ, – the same group that handed out the Corporate Integrity Award earlier this year. Consumers had complained to the regulator about the problem, and its investigation concluded that cracks in refueling hoses could cause leaks in some extreme cases, increasing the risk of fires. AQSIQ could order Ford to broaden the recall if it finds out that similar problems affect other Ford vehicles. According to Ford China spokeswoman Claire Li, Changan Ford – the moniker attached to the company’s joint venture in China – had already launched a satisfaction program with its dealers in January, 2012 to address the issue. It decided to announce a full recall to “alleviate any potential customer concerns,” she said.
According to the China Association of Automobile Manufacturers, the Focus was the best-selling model in the compact sedan segment last year with sales of 403,600 units, and it continued to lead the category during the first seven months of 2014. However, this is not the first Focus recall to plague the automaker. Ford recalled 236,643 cars in 2010 to fix ignition problems. It also recalled 25,802 imported Edge sport utility vehicles in July. That recall came on the heels of an 80,857 unit recall of its Kuga SUV last December. China has recently ramped-up efforts to protect consumers from vehicle safety defects, leading, in part, to a record 5.3 million recalls industry-wide in 2013.
Overall, Ford has continued its rapid sales growth in China with a 30 percent increase so far this year. The Dearborn-based automaker had historically been a fringe player in the Chinese market, trailing competitors such as General Motors and Volkswagen by wide margins for years. Hoping to further fuel that growth, Ford has announced plans to add an additional four assembly plants and three powertrain plants by 2015 to the tune of $4.9 billion. The company has also announced its intention to double its number of dealers by adding an additional 400 over the next two years.
Additionally, Ford reportedly plans to expand its research and development operation in China. According to The Wall Street Journal, the automaker plans to invest $100 million to boost its workforce in the country by 50 percent to about 2,000 people by 2018. Separate reports indicate that it also plans to construct a new test track facility at its Research and Engineering Center in Nanjing, south of Beijing. The company hopes these additional investments will help it anticipate and react faster to consumer wants and changing marketplace dynamics in China, and in other growth markets in Asia.