The second-largest U.S. automaker Ford (F, Financial) witnessed a year-over-year sales decline of 9% to 140,000 units in December. As far as 2017 is concerned, the Blue Oval sold 1.19 million vehicles, down 6% as compared with 2016.
Bird’s-eye view
Annual sales for Changan Ford Automobile (CAF) stood at approximately 827,000 vehicles, which translates to a 14% sales decline from 2016. For December, they dropped 12% on a year over year basis to 102,219 units. On the other hand, Jiangling Motors Corp. (JMC) experienced an annual sales gain of 11% from 2016 to nearly 293,000 units sold. For December, JMC sales surpassed 30,000 units, down 6%.
Lincoln’s 2017 sales amounted to more than 54,000 units, up a mammoth 60%. Its December volumes rose 41% to 41,030 units. This monthly sales gain was attributable to record sales of Navigator, MKX, MKC, Continental and MKZ.
Source: www.carsalesbase.com
Ford Escort registered its best-ever monthly sales figure with more than 42,000 units sold, up 18%. On the other hand, Mondeo sales reached new heights in December with roughly 45,000 units sold, which translate to 6% sales gain. On the contrary, Kuga and Edge sales totaled 10,164 units (down 30%) and 9,385 units (down 28%), respectively.
Ford Mustang, too, had a record-breaking annual sales figure. Mustang sales surpassed 4,200 units in China for the whole year, up 35%. Mustang also recorded its best-ever quarterly performance in fourth quarter of 2017. In addition, Mustang’s December sales surged 6%, which was its best December sales record.
What caused Ford’s China sales to drop in 2017?
Clearly, the company’s growth in the Asian economy hasn’t been incredible when compared with its rivals. Several factors have put pressure on Ford’s China sales last year. Some of these include the Chinese government’s decision to increase purchase tax from 5% to 7.5% from the beginning of 2017. This resulted in huge demand for cars in fourth quarter of 2016 and a huge drop in small-car sales in the first few months of 2017. Moreover, continuous and persistent pricing pressure from Domestic Chinese automaker also took a toll on Ford’s China sales.
As a result of this, Ford has devised a series of plans to revive growth in the China market. The company plans to launch more than 50 new vehicles over the next few years that would include many new SUVs and plug-in vehicles. More emphasis would be put on local production including the first Lincoln, which would be built in China. The blue oval will also try to reduce its operational cost in China so as to have higher margins.
Disclosure: I do not hold and position in the stock mentioned in this article.
