Struggling to roll out new products, Michigan-based automaker Ford Motor Co. (F, Financial) witnessed an 11% sales decline in China to 83,666 units.
In addition, the company said its year-to-date sales in China plummeted 19% on a year-over-year basis to 207,139 units. Ford’s sales for the quarter are an indication of how the company is struggling to keep pace with the growth of the Asian country's economy, which swelled 2.8% over the same period.
A snapshot
On a positive note, the company took the wraps off two redesigned models last week: the radically revamped Focus compact car and the more moderately recast Escort. However,Ă‚ management believes the company will still come under pressure in China this year due to lack of new or considerably redesigned models in its portfolio.
Ford’s joint venture in China, Changan Ford has had a poor run as sales dropped 22% year over year to 46,217 units. Furthermore, sales plunged 26% in the first three months of the year to 124,459 units.
Ford’s other joint venture, Jiangling Motor Corp., experienced monthly sales growth of 5% while its year-to-date sales fell 6% year over year.
Ford to manufacture Lincoln vehicles in China
Ford’s Lincoln luxury brand saw sales grow 27% in March, while its first-quarter sales soared 10% from the same period last year. Hoping to expand sales in the world’s hottest car market, the company’s premium luxury Lincoln brand plans to make five new vehicles in China. Currently, all Lincoln vehicles are imported from North America.
Since the Chinese government imposes a 25% import tariff, it is difficult for Ford's Lincoln vehicles to compete against General Motors’ (GM, Financial) Cadillac, which is built in China. Zhu Kongyuan, secretary general of the China Auto Dealers Chamber of Commerce (CADCC), commented:
"As long as Lincolns are not manufactured in China, the brand's sales will no doubt suffer continuously."
Stay tuned for further updates.
Disclosure: I do not hold any positions in the stocks mentioned in this article.
