Wu Shengbo, President and CEO of Ford China, who has just been in the automotive industry for two years, is an expert at turning losses into profits.
When Wu Shengbo joined Ford China in October 2022, the company had been suffering losses for five consecutive years since 2017.
"Before I came, the last time Ford made a profit in China was in the third quarter of 2017. Before I took over as president of Ford China on March 1, 2023, (Ford China) had lost a total of US$2.6 billion to US$2.7 billion." On January 8, Wu Shengbo told the Paper in his new sun-filled office in Yangpu District, Shanghai.
Contrary to outside expectations, after Wu Shengbo officially took over in the second quarter of 2023, the Chinese business began to make profits in the third quarter of 2023.
In 2024, according to Jim Farley, CEO of Ford Motor, when announcing the first three quarters of the financial report, China and its exports contributed more than $600 million to Ford's EBIT in 2024. This includes Ford's exports mainly to other parts of Asia and South America.
Ford China just left the emergency room and is still in the ICU
How did Wu Shengbo do it?
What the outside world could see was that he took drastic measures to "cut off" various unprofitable business lines, even including the classic A-class car Focus; and various "cost-cutting" measures such as moving the company's headquarters from the Lujiazui area in Pudong, Shanghai to the Yangpu District.
"After I came to Ford, I had to take some measures in the short term, just like a patient who has entered the emergency room. The first goal is to survive." Wu Shengbo said, but "cutting" is not a solution to the problem. Just like when there is a heavy bleeding, you have to stop the bleeding first, but stopping the bleeding will not make you healthy. You still need to rely on exercise, nutrition, and a series of other measures to stay healthy.
"Whether it's a cost-cutting method, cutting some things or focusing, these are all short-term approaches, but corporate operations must focus more on long-term strategies." Wu Shengbo believes, "If Ford China was in the emergency room before, it is still in the ICU now. After coming out of the emergency room, from the ICU to rehabilitation, and finally to complete health and returning to work, this process has a completely different approach."
What should we do at this time? Wu Shengbo believes that following the trend is always a taboo in doing business, and we must find a path that suits us. "To build a brand, we want to serve everyone, but in fact we can't serve anyone well. I think that no matter what industry we are in, we can't avoid three core issues: Who do you want to serve? What do you use to serve him? How do you serve him?"
Another thing that left a deep impression on Wu Shengbo and moved him was what Chairman Bill Ford said to him when he chose to come to Ford: "You can do anything in China, but the red line you must never cross is that no matter what you do, you must not tarnish the Ford brand, because this is the honor of my family. Making money is not the most important thing, but reputation is the most important. The Ford brand has been around for 120 years. Even if our business in China cannot continue in the future, I will not damage my family's reputation, harm the interests of consumers, or even their lives, just to stay in this market. This is something I absolutely cannot tolerate."
From being a "small fish" in a big pond to being a "big fish" in a small pond
Wu Shengbo said with emotion that in the era of gasoline vehicles, no matter which brand was leading in the domestic market, it would not basically make others unable to survive. Even if domestic brands were relatively weak, they still had some niche markets and could gradually develop through hard work. But now, some brands are in a life-and-death struggle to do business. When the "big fish" becomes a domestic brand, it will not only not leave any food for you, but will also eat you up. It is a completely different business philosophy.
Wu Shengbo said that Ford cannot change this culture. Therefore, the first step in Ford China's strategic adjustment is to change from being a "small fish" in a big pond to being a "big fish" in a small pond, focusing on and adjusting the product line, and locking in large SUVs, hardcore off-road vehicles and pickup trucks.
Another thing is to expand export business. During Wu Shengbo's two years in office, export volume increased from more than 10,000 units to 168,000 units in 2024.
Third, intelligence and new energy are bound to be the major development trends. In this direction, Ford does not need to develop cars in isolation, but will work with the Chinese industrial chain to develop future products.
Wu Shengbo said that Ford China has made some initial achievements in adjusting from these three perspectives. In 2024, even though most foreign brands participated in the price war, their sales volume still dropped by double digits. However, Ford and Lincoln did not participate in the price war, and their sales volume only dropped by single digits year-on-year, while their profits increased significantly.
In 2025, Ford will have a wave of brand actions with three key points. One is Build, a reliable production tool; one is Thrill, speed and passion; and the third is Adventure, such as the Ford Explorer and the Ford Mustang that shouts "No road is my way".
Wu Shengbo revealed that after he came to Ford China, he figured out a few things and worked hard on "willingness to give up", giving up some things that do not belong to you, but you must do your best to give up the things that belong to you. "Maybe 80% of people only want a refrigerator, a color TV, and a big sofa, but I have to find my own path and follow it."
