Ford’s China Pivot: Exports and Geely Joint Venture Drive Profitability and Cost Efficiency

Key Points

• Chinese automakers have rapidly evolved from industry novices to global leaders, particularly in the electric vehicle (EV) sector.

• Ford’s strategic shift from competing in China’s domestic market to utilizing the country as an export hub has successfully reversed its financial losses.

• A new joint venture with Geely in Europe aims to lower production costs while leveraging Chinese EV development expertise.

“I think you have to see the [Detroit Three] exit China as soon as they possibly can,” said Bank of America securities analyst John Murphy, during his annual presentation of “Car Wars,” a closely watched industry report.

That warning was issued just over two years ago as analysts foresaw the intense competition in China’s domestic market. A brutal price war, a long list of competitors, rapid electric vehicle (EV) technology development, and other factors have made life extremely difficult for foreign automakers in China. Furthermore, competitors Ford Motor Company (NYSE: F) and crosstown rival General Motors (NYSE: GM) want no part of Chinese automakers invading their highly profitable U.S. market. Caught between a rock and a hard place in China, Ford has executed two major strategic shifts to evolve its global business—and the results are proving successful.

Not exiting, but exporting

Rather than exiting the market entirely, Ford adopted a strategy that has become increasingly common: leveraging Chinese operations as a global export hub. The company scaled down investments in local sales and repurposed its joint ventures, Changan Automobile and Jiangling Motors, to export vehicles worldwide. Models produced in China, such as the Equator Sport crossover, Mondeo sedan, Lincoln Nautilus SUV, and electric commercial vans, are now shipped to Southeast Asia, the Middle East, South America, and Europe.

Ford will build a brand around racing heritage and off-roading to try and boost sales in Europe. Image source: Ford Motor Company.

Ford posted six consecutive years of financial losses in China, from 2018 through 2023. However, in 2024, the company finally reversed this trend, posting roughly $600 million in earnings, largely driven by its pivot to exports. Ford’s latest move reflecting its “In China, for the World” strategy is the export of its Ford Transit City to 52 countries and regions across five continents.

This approach appears far more productive than a complete market exit, especially given the potential for market dynamics to shift in the coming years. By utilizing its production capacity and joint venture expertise to lower costs, improve efficiencies—adopting what industry insiders call “China Speed”—and diversify its global manufacturing footprint, Ford is turning lemons into lemonade. The company is taking this strategy a step further with its next major move.

If you can’t beat ’em…

Pending regulatory approvals, Ford and Chinese automaker Geely will jointly build vehicles at a Ford plant in Spain under a new European joint venture. Operations are expected to begin in the first half of 2027, with the first vehicles rolling off the production line in 2028. Under the current agreement, Ford is set to own 66% of the joint venture, with Geely holding the remaining 34%. The partnership is expected to produce a new Ford EV crossover, a new member of the Bronco family, and two electric Geely SUVs.

This joint venture acknowledges the new global reality of intensifying competition and relentless cost pressure. Much as Chinese automakers learned from foreign manufacturers decades ago, Ford is now learning how Chinese companies have drastically lowered costs by commoditizing certain components and cutting their design process time in half. This venture is mutually beneficial: while Ford seeks to accelerate its development cycles, Geely can expand its global footprint by utilizing underutilized production capacity, avoiding margin-eroding tariffs, and bypassing the need to build local factories from scratch.

What it all means

Ford is navigating the complex global automotive landscape effectively. By reversing years of substantial losses without exiting China and taking massive write-downs, the company has demonstrated the success of its export-focused pivot. Additionally, Ford has secured a foothold in a potentially invaluable joint venture where it can learn how to drastically reduce costs and accelerate its design and development processes. For context, the industry standard for designing an all-new vehicle ranges from 40 to 60 months (and sometimes up to 80), whereas Chinese automakers typically complete the same process in 18 to 24 months.

In summary, while Ford wants no part of Chinese competition entering the lucrative U.S. market, nor does it wish to compete in the brutal domestic Chinese market, the Detroit automaker recognizes the immense value of joint ventures and exports that directly tie it to China—and this balanced strategy is working.

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