The U.S. multinational automaker Ford (F, Financial) said that its China sales for the month of February went down significantly by 30% year-over-year. As far as year-to-date sales are concerned, its volume came in at 123,773 vehicles, down 23% when compared with the same period last year.
The company cited slow launch of products as well as lack of redesigned car models in its portfolio. Having said this, the company finds itself in a tight corner as it will have to fight hard for market share. Even now, the Blue Oval said it’s not expecting rolling out new products in China anytime before the first quarter ends.
Bird’s-eye view
Changan Ford Automobile saw February sales decline of 31% year over year to approximately 31,000 units. Also, Jiangling Ford Automobile witnessed a setback with sales dropping 39% to less than 13,000 vehicles.
Given the horrific run that the company is currently having in the Asian economy, Ford needs to pull up its socks, organise its corporate structure, create a single national distribution division and most importantly, working toward intensifying its local manufacturing footprint. Peter Fleet, Ford Asia Pacific president and China CEO, commented:
“As we reposition our business in China, our key priorities for 2018 are to strengthen our core business, improve our operational fitness and accelerate our strategic shift to capitalize on emerging market opportunities.” He further added: “This is an important year for us as we continue to focus on healthy and sustainable business growth in China,” “This is not a short trip for us. We’re in it for the long haul.”
Coming to long-term plans, the company looks forward to launch more than 50 new and redesigned vehicles in China by the end of 2025. Those new models would comprise eight new SUVs and 15 new electric vehicles.
China auto market
China auto sales amounted to more than 4.5 million vehicles, which represented a gain of 1.7% over the prior year’s same period. While passenger car sales in the first two months of the year came in at 3.9 million units (up 2.1% year over year), 75,000 EVs were sold. As a matter of fact, analysts say that they don’t expect the China auto industry to grow at a rapid rate, which it normally grows at. They anticipate only 3% growth this year.
A factor that troubles the Blue Oval is the fact that the Chinese automakers launch products at half the price of their foreign counterparts. However, if Ford’s new lineup arrives soon, it can pull through.
Disclosure: I do not hold any position in the stock mentioned in this article.
