Manufacturing News

Ford slides deeper into China rut

Ford Motor Co.’s China slump is intensifying, with vehicle sales tumbling 38 percent in June and the automaker recording its worst ever first-half, as buyers shunned aging models that are awaiting updates and flocked to rivals.

The automaker said Friday it sold 62,057 vehicles in China in June. Sales in the first half fell 25 percent to 400,443, down 25 percent compared to the year-ago period. According to consultancy LMC Automotive, it was Ford's biggest first-half percentage decline since starting operations in China in 2001.

Ford, which undertook a big expansion in China earlier this decade, is paying the price for a lack of new models in its lineup. Last year, deliveries fell 6 percent even as overall vehicle sales in China rose 3 percent.

“We always knew it would be a challenging year for us given our position in the product cycle,” Peter Fleet, head of Ford’s Asia-Pacific operations, which include China, said in a statement.

Fleet previously said Ford's sales won’t likely regain momentum in China, the world's biggest auto market, until next year when the first of new vehicle models arrive in showrooms in large enough numbers.

The dim sales numbers come as the United States and China slapped tit-for-tat duties on $34 billion worth of imports on each other Friday, with Beijing accusing Washington of triggering the "largest-scale trade war" ever in a sharp escalation of their months-long conflict.

With automobile imports subject to additional duties by China, Ford has much to lose. Last year, it shipped about 80,000 vehicles to China from North America, more than half of them luxury Lincoln models – including the Continental sedan and the Lincoln MKX crossover.

Ford said a day before it won't hike prices of imported Ford and Lincoln models in China, thus absorbing the additional cost of tariffs on U.S.-made vehicles.

Ford’s troubles in China, which include the absence of a country head following the abrupt departure of the previous chief in January after only five months at the helm, contrast with General Motors' steady performance there. Ford's Fleet has been overseeing the company's China operations, as it searches for a new country chief.

GM sold 4.04 million vehicles in China last year, up 4.4 percent from a year earlier. Ford, in comparison, sold 1.19 million cars last year, down 6 percent. Japan’s Toyota Motor Corp and Honda Motor Co also outsold Ford last year in China.

To reverse the slump, Ford has said it is overhauling its product lineup for China. Redesigned Focus compact and Escort subcompact cars are due to hit showrooms in China later this year, along with the redesigned Lincoln MKC and Nautilus crossovers.

In June, China deliveries at Ford’s premium Lincoln brand rose 12 percent to 4,350 vehicles, with sales in the first half totaling 24,314 vehicles, up 4 percent from a year earlier.

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