The secret behind Ford's success in China

Reporting by Eunice Yoon | Writing by Ansuya Harjani
Ford bets big on China's luxury market

Ford, which has seen bumper sales growth in China, says the key to its success in the world's largest auto market has been its wide range of product offerings that allow it to effectively target first-time buyers.

The U.S. auto giant's sales in the mainland jumped 45 percent on year in the first quarter, making it one of the fastest-growing major international carmakers in the country.

"[Chinese buyers] want different sized vehicles – small, medium and large – because they make a lifestyle choice with their decision," Alan Mulally, CEO of Ford told CNBC on the sidelines of the Beijing auto show on Sunday. "We probably have the most complete line-up of vehicles anywhere in the world now."

Visitors check out Ford cars on display at the China International Exhibition Center new venue during the 'Auto China 2014' Beijing International Automotive Exhibition in Beijing.
AFP | Getty Images

Ford's Focus, which has become a big hit in China, was the world's best-selling car in 2013. Last year, Focus sales in China rose 50 percent to total 403,219.

"Most people coming into the market are first-time buyers – so if you have a world class product they'll consider you in their purchase decision," he added.

While the company has made great strides in China, it still has a long way to go to catch up with other foreign players in the market. Its overall market share was 4.4 percent in 2013, compared with 15.1 percent at Volkswagen and 14.5 percent at General Motors, according to market researcher IHS Automotive.

Read MoreFord retains world's top selling car with Focus

Consumer preferences

As China's auto market matures, mainland buyers have become increasingly discerning, says Mulally.

"They want the best quality, best fuel efficiency, all the safety features, they also want to be seamlessly connected to the internet, and of course they want the very best value," he said.

Mulally says Ford is aiming to bring "affordably luxury" to mainland buyers with the introduction of its premium Lincoln brand.

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The automaker plans to open eight Lincoln retail outlets in seven Chinese cities including Beijing and Shanghai starting in October. Ford aims to boost the number of stores to 60 and push into a total of some 50 cities by 2016, according to Reuters.

"We are clearly later to the market in China but this is a perfect time for us to be coming because the economic development of China and the discretionary income that the consumers have," he said.

GM's recall crisis

When asked what he has taken away from General Motors' ongoing recall debacle, Mulally said Ford has "very reliable processes."

Read MoreRecalls have not hurt our China business: GM President

"We deal with anything we find very decisively and we're continuing to do that," he said.