Ford Motor Co. (F, Financial) released its third quarter China sales on Oct 16. Quarterly sales rose on a year-over-year basis thanks to new product launches and localization strategy success. In addition, strong sales at the commercial vehicles and luxury segments helped results.
Detroit-based automaker General Motors Co. (GM, Financial), which reported sales on Oct 12, posted a sales growth of 12% on a year-over-year basis to more than 771,400 units in China.
Overview of the quarter
Ford sold a total of 164,352 vehicles in China in the third quarter, which reflected a gain of 25.4% from a year earlier. The quarter also saw 3.6% sales growth over the second quarter.
Ford Brand SUV sales reached 38,749 units, which grew 72.2% compared to the year before and 34.8% as compared to the second quarter.
Lincoln luxury vehicles witnessed a sales increase of 64.8% on a year-over-year basis to 19,143 units, driven by strong performance of Lincoln Corsair, with sales amounting to 11,041 units in the reported quarter. Ford China's CEO and president Anning Chen commented the following on the company's performance:
"Ford is strengthening its sales momentum in China by building on growing consumer preference for our iconic brand and favorable product mix of luxury and near-premium utility vehicles. Our localization strategy to produce in China world-class Ford and Lincoln vehicles, including the newly launched Ford Explorer, Lincoln Corsair and Lincoln Aviator, has further enhanced our competitiveness in delivering the best products and services that Chinese consumers are looking for."
With the exception of Chevrolet and Baojun, all major General Motors brands posted quarterly growth in China. Wuling and Buick were the best brands in China in terms of volume sold. While the former sold more than 270,000 units, the latter delivered more than 250,000 units. You can find more detail about GM's China results in my previous article.
Road ahead for Ford and GM
General Motors has introduced more than 10 new electric vehicles in the world's hottest car market. The company's NEV sales in China were more than two times the volume in the first nine months of the year as compared to the prior year. Given the scintillating run NEVs have had in China, the company said more than 40% of the new launches in China in the next five years will be NEVs.
As for Ford, the company struggled to grow its sales in the world's hottest car market for the past two years. Ford's sales slipped 37% in 2018, followed by a 26% decline in 2019. The company cited aging model lineup as the reason for the decline.
Fortunately, Ford has recorded a second successive quarter of sales growth in the region. To keep the momentum going, the company said it would launch new products and adopt localization strategies.
Disclosure: I do not hold any positions in the stocks mentioned.
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