Ford says industry sales may shrink for first time in 17 years
Automakers may sell fewer vehicles in China this year for the first time since at least 1998 as demand slows industrywide, according to the low end of Ford Motor Co.'s revised projection.
Ford expects industrywide sales of passenger vehicles, buses and commercial trucks will range from 23 million to 24 million this year, CFO Bob Shanks said Tuesday. Last year, industry sales in China totaled 23.5 million vehicles.
The low end of that forecast would represent the first decline in at least 17 years, according to official sales data. Before 1998, only production figures were available.
"It's clear we've seen a ... slowdown in the market there in the industry," said Ford CEO Mark Fields, according to a transcript of the call.
"We're still very bullish on China, but it's going to go through its fluctuations and that's what happens in emerging markets and we're going to work our way through it in a positive way and grow the business."
Ford previously estimated China industry sales this year would range from 24.5 million to 26.5 million vehicles.
The company's forecast is the bleakest assessment to date by a major multinational carmaker of consumer demand in China, where sales have slowed due to a combination of weaker economic growth, registration curbs and a volatile stock market. The state-backed China Association of Automobile Manufacturers this month slashed its 2015 growth forecast to a 3 percent increase, the slowest expansion in four years.
"This may not be the last downward revision from automakers," said Steve Man, Hong Kong-based analyst with Bloomberg Intelligence. "If another city caps new car registrations, the weak sales may continue through 2016."
For carmakers like Ford, General Motors and Volkswagen AG, China now is growing more slowly than their respective home markets. Even Japanese automakers, which are doing better this year in China than their European and American counterparts, have warned of a "downward spiral" of excessive competition, capacity and discounting that will eventually affect them.
The low end of that forecast would represent the first decline in at least 17 years, according to official sales data. Before 1998, only production figures were available.
"It's clear we've seen a ... slowdown in the market there in the industry," said Ford CEO Mark Fields, according to a transcript of the call.
"We're still very bullish on China, but it's going to go through its fluctuations and that's what happens in emerging markets and we're going to work our way through it in a positive way and grow the business."
Ford previously estimated China industry sales this year would range from 24.5 million to 26.5 million vehicles.
The company's forecast is the bleakest assessment to date by a major multinational carmaker of consumer demand in China, where sales have slowed due to a combination of weaker economic growth, registration curbs and a volatile stock market. The state-backed China Association of Automobile Manufacturers this month slashed its 2015 growth forecast to a 3 percent increase, the slowest expansion in four years.
"This may not be the last downward revision from automakers," said Steve Man, Hong Kong-based analyst with Bloomberg Intelligence. "If another city caps new car registrations, the weak sales may continue through 2016."
For carmakers like Ford, General Motors and Volkswagen AG, China now is growing more slowly than their respective home markets. Even Japanese automakers, which are doing better this year in China than their European and American counterparts, have warned of a "downward spiral" of excessive competition, capacity and discounting that will eventually affect them.
