Ford Motor Co. (F, Financial), the second-largest U.S. automaker, reported an 8% sales decline in China to approximately 118,000 vehicles in November. Of the total sales, 84,231 units were sold by Changan Ford Automobile (down 12% year over year), one of its joint ventures, while the remaining 26,083 units were sold through Jiangling Motor Corp. (down 1% year over year). The company’s year-to-date sales dropped 6% to 1,056,000 units.Â
While sales of small and midsize sedans were striking, sales of the company’s key models remained down, thereby allowing rival automakers to get ahead of them in China. Here’s a detailed analysis of Ford’s monthly performance in China.
Snapshot of the month
Ford vehicles sold in China, including the EcoSport, Kuga, Edge, Explorer, Focus and Everest, experienced double-digit sales decline in November. On the bright side, Lincoln sales for the month surged a mammoth 70% year over year to more than 6,000 vehicles, led by record sales of its premium SUV trio , the MKC, MKX and Navigator, whose sales surged a combined 27% compared with November 2016. Lincoln’s year-to-date volume stood at 52,000 units, up 83% year over year.
Escort sedan sales in China improved 5% to 34,589 units. Mondeo sales spiked 61% on a year-over-year basis to 12,000 vehicles, whereas its year-to-date sales rose 1% to 96,000 units. Tourneo’s total sales came in at 441 units. Mustang sales soared 49%. In contrast, Ford’s imported vehicle sales dipped 22% from the prior-year period.
Ford’s struggle continues in the dynamic Chinese market
Most of the global automakers have operations in China. However, the domestic automakers are putting pressure on foreign automakers in the lower-cost market segment. Indeed, the competition is huge and in such an environment, Ford needs to raise the bar.
Earlier this month, the Michigan-based automaker announced its plans to launch more than 50 new vehicles in China by 2025. However, it still has a long way to go. Currenlty, it is revamping its existing models by putting in more technology. The automaker will also be working to upgrade its Lincoln brand.
Ford China CEO Jason Leo commented:
"The upcoming launch of the new Navigator early in 2018 will enrich our Lincoln product portfolio even further. For the Ford brand, stand-outs this month include the Mondeo, which continued its recent sales momentum to generate a 61 percent increase in sales over the same period last year, as well as Mustang and Focus RS.”
Last word
The company witnessed lopsided development this month. Ford’s overall sales might have declined, but there were definitely a few positives, including robust performance of compact sedans as well as the Lincoln brand.
Ford recently signed a contract with Alibaba Group Holding Ltd. (BABA, Financial) to work together on connectivity, cloud computing, artificial intelligence, digital marketing and online sales. It will be interesting to see whether the company’s turnaround efforts bear fruit or fall flat. Stay tuned for December figures.
Disclosure: I do not hold any positions in the stocks mentioned in this article.
