Ford Motor Co. (F, Financial) along with its joint ventures in China delivered 64,641 vehicles in February, an improvement of 2% compared with February 2016. So far in the first two months of the year, the "Blue Oval" has sold 153,073 vehicles, down 21% over the same period a year earlier. The decrease in sales is attributable to the Chinese New Year and the reduction in tax incentive by the Chinese government on sales of small cars with engines smaller than 1.6 liters.
Peter Fleet, vice president of marketing, sales and service of Ford Asia Pacific, was happy to report “strong demand from Chinese customers for our three-row Edge SUV and luxurious Taurus large sedan, along with our performance lineup led by our iconic Mustang. We are also excited by the fantastic early response to the upcoming launch of our F-150 Raptor in China.”Â
A look at the numbers
The monthly deliveries of Changan Ford Automobile (CAF) came in at 42,695 vehicles, a decrease of 12% compared to a year ago. Year-to-date sales for the joint venture stood at 108,858 vehicles, a decline of 32%. Changan is working hard to record a strong first quarter for the year, particularly after closing 2016 on a high note. The showroom traffic has been getting better and the company anticipates 2017 to be an even better year with the launch of some new vehicles, including the EcoSport.
Ford's other joint venture, Jiangling Motor Corp., sold 20,794 vehicles in February, up 48% compared to a year ago. So far this year, Jiangling has sold 41,043 vehicles, a 31% increase from last year. Ford Edge sales were up 20% in February. Ford Everest also witnessed strong sales growth of 34% during the month.
Ford has been doing well in the large SUVs segment, which continues to see strong momentum in sales as Chinese consumers are increasingly preferring this category of vehicle. This was evident from the sales of Ford Edge, which inched up 20%, and Everest, which improved 34% in February. Ford Taurus is also experiencing strong demand with an impressive sales hike in the first two months of the year.
Ford's imported vehicles may form a small portion of its entire sales, but they are highly profitable and have witnessed growth over the past few quarters. Ford Mustang sales momentum continued to see new heights with volumes more than doubling during the month. The muscle car is imported from Michigan. Sales of other high-performance models such as Focus ST and RS were also up by a stunning 67% compared to a year ago. Ford’s performance vehicles are extremely popular among Chinese consumers.
Last word
Ford is not the only automaker that has suffered from declining sales in the first two months. Crosstown rival General Motors (GM, Financial), which has a wider presence in China, reported a 15% sales drop for the first two months. Japanese automaker Toyota (TM, Financial) reported a 4% decline in sales for the same period. In contrast, Honda (HMC, Financial) and Nissan (NSANY, Financial) registered growth of 18% and 3%. Ford expects Changan sales to revive over the coming months. If this really happens, Ford could record another fantastic year in China. It will be interesting to see how the rest of the year unfolds for America's second-largest automaker.
Disclosure: I do not hold any position in the stocks mentioned in this article.
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