Ford's China Sales Sputter
April 13 2017 - 12:13PM
Dow Jones News
By Chester Dawson
DETROIT -- Ford Motor Co. hit another speed bump in a core part
of its business, posting a 21% slide in auto sales in China where
the company plans to ramp up production despite signs of cooling
demand for passenger cars and trucks.
Chief Executive Mark Fields has made China a priority and the
company sold a record 1.27 million vehicles there last year. But it
has lagged behind rivals such as General Motors Co. and Volkswagen
AG, and the pace of growth in the Chinese market is expected to
weaken. In March, overall car sales rose 1.7%, compared with a 6.3%
gain in the first two months and a nearly 10% increase a year
ago.
Ford said its sales in China fell to 90,457 vehicles in March,
from 114,788 a year earlier. Those sales include vehicles made by
the company's joint venture partners in China, but exclude its
Lincoln premium brand vehicles.
"We remain committed to offering a great portfolio of vehicles,"
said John Lawler, chairman and CEO of Ford Motor China, in a
statement.
The No. 2 U.S. auto maker blamed the drop on China's decision to
pare back a tax break for vehicles with smaller engines. Sales of
vehicles that didn't benefit from the tax incentive rose in the
first quarter, even as the brand's overall volumes fell 19% on the
year.
The sluggish performance in China comes when Ford has lost
market share in its home market and seen its stock price trade at
five-year lows. The company unnerved investors last month by saying
it would take a $295 million charge for recalls, the second time in
a year that safety-related issues with vehicles have dented its
bottom line.
China has been a bright spot for Ford, but its inroads there
face increasing headwinds. In January, the China Association of
Automobile Manufacturers group predicted a 5% rise in China's car
sales this year compared with 15% in 2016.
Even so, Mr. Fields and has taken steps in recent weeks to
bolster Ford's presence in China, the world's largest car
market.
Earlier this month, Ford said its local joint venture Changan
Ford Automobile Co. will start building electric cars, starting
with the Mondeo Energi plug-in hybrid vehicle next year, followed
by a new all-electric sport-utility vehicle within five years. The
company hopes to take advantage of Chinese government policies
seeking to promote the sales of greener vehicles.
In March, Ford said it planned to start production of Lincoln
premium brand vehicles in China by late 2019. The company sold
33,000 imported Lincolns in China in 2016, three times more than
the year before, and the Detroit-based car maker is betting that
local manufacturing will goose demand by avoiding a tariff on
imported vehicles.
Write to Chester Dawson at chester.dawson@wsj.com
(END) Dow Jones Newswires
April 13, 2017 12:58 ET (16:58 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
Ford Motor (NYSE:F)
Historical Stock Chart
From Apr 2024 to May 2024
Ford Motor (NYSE:F)
Historical Stock Chart
From May 2023 to May 2024