China is the world’s largest car market, and almost all car industry experts believe that no global manufacturer can flourish without strong sales in the country that has a population of 1.4 billion people, well over four times the number of people in the United States. Ford Motor Co.’s (NYSE: F) sales fell 43% in China in September, a blow to the already reeling company and a threat to the tenure of its embattled CEO James Patrick “Jim” Hackett.
Ford’s sales in China in September were only 64,383. For the first nine months of the year, sales are off 30% to 585,171. Hackett’s man in China, Peter Fleet, president of Ford Asia Pacific and board chair and CEO of Ford China, made the extraordinary statement as he commented on China sales:
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.
This is said as if all the global manufacturers that compete in China are not employing the same tactics but from stronger positions.
Hackett has two other strikes on him. The first is that Ford’s U.S. sales dropped 11.3% in September to 197,404. For the first nine months, sales were off 2.4% to 1,887,625. Ford will eliminate most of the cars it sells in America because their sales are so poor. The drop in sales when that happens will be even steeper.
Hackett also has promised a detailed description of Ford’s future, which includes the company’s path forward in the electric and autonomous sectors. He also promised to lay out a restructuring that will cut billions of dollars in expenses and likely cost thousands of workers their jobs. He has not made any progress on these goals, at least in so far as he has not announced them to Ford’s workforce or Wall Street.
Ford’s share price is down 32% so far this year. Hackett has no short-term way out of his difficult position. China results have just made that even more difficult.