Ford Motor Co. (NYSE: F) is having a very bad year in China. Sales fell 43% year over year in September and are down 30% for the first nine months of the year. The only positive news is that every automaker is struggling too.
Auto sales fell by 11.6% across China in September, the third consecutive month of declining sales, according to data from the China Association of Automobile Manufacturers. The association blamed a sluggish domestic economy, deleveraging and a crackdown on vehicles that emit too much pollution. For the year to date, sales are up 1.5%, nothing to boast about for an industry that has been posting solid growth for more than two decades.
Ford is not suffering alone. General Motors Co. (NYSE: GM) reported earlier this week that September sales in China dropped nearly 15% and sales are down by 2.5% year to date. China is GM’s largest market, and the company could really be hurt by a bigger drop in sales. Volkswagen, also a big player in China, reported that sales fell 10.5% in September.
Peter Fleet, CEO of Ford China, observed:
We are intensely focused on our sales turnaround plan in China, which includes an aggressive cadence of product introductions to meet the needs of our Chinese customers, including the launch of the highly anticipated all-new Ford Focus. We believe the new products, which have been custom-designed and developed with Chinese customers in mind, will help us to regain momentum in the world’s largest auto market.
Sales of the Lincoln Navigator rose 21% to 191 vehicles, while the company’s F-150 Raptor saw a 409% jump to 224 vehicles sold. Lincoln MKZ sales rose 28% to 1,550 and the Teshun commercial van Ford sells in a joint venture with Jiangling Motor saw a sales increase of 10% to 3,560 vehicles.
Sales of all models built with joint venture partner Changan dropped: Escort sales fell 54%, Focus sales were down 61% and Edge sales dropped 36%.
Ford still does not have an electric vehicle in its Chinese lineup, although the company has signed another joint venture deal, this one with Zotye Auto, to create Ford Smart Mobility to “focus on providing smart, customized all-electric vehicles” to fleet operators and drivers in the country’s “fast-growing ride-hailing market.”
Competing in the market for electric vehicles will be a challenge for a late starter like Ford. The government has poured $15 billion into what it calls new energy vehicles this year and stands ready to dump in another $47 billion. That had led to the creation of 487 electric vehicle makers in China by mid-July.
Ford’s stock has posted a third-consecutive 52-week low already Friday morning, dropping to $8.75. The 52-week high is $13.48.