Ford China Sales Continue Year-Over-Year Tumble
Ford Motor Co. (NYSE: F) reported last Friday that, year-over-year, second-quarter sales in China fell 21.7% to 154,042 vehicles. That’s not so good, but it is considerably better than the 35.8% year-over-year drop the company reported for its first-quarter sales in China.
Sequential sales of Ford- and Lincoln-branded vehicles rose 24% and 28%, respectively. Ford noted that the company “made a determined effort to implement [new] initiatives” during the quarter, including a new management team with strong experience in the Chinese market and forging stronger ties with joint venture partners.
The company noted that aggressive action reduced dealer inventory at the end of June to 28 days, the lowest level in 18 months.
That aggressiveness certainly included reduced pricing. Sales of imported and domestic Ford-branded vehicles rose 24% sequentially, although they were down 24% year over year. Lincoln-brand sales, up 28% sequentially, slipped by 7% year over year.
The company’s ChangAn Ford joint venture recorded a sales boost of more than 30% in each of May and June, while sales of Ford’s joint venture with Jiangling fell by 13.1% year over year.
Last month, Ford announced that it will reduce the number of its European facilities from 24 to 18 and fire some 12,000 employees. Ford plans to close its Bridgend engine plant in Wales, its transmission plant in France and two assembly plants and one engine plant in Russia. A transmission plant in Slovakia will be sold. Shift reductions are also planned for assembly plants in Germany and Spain.
So far the company has held the line in China as it deals with new restrictions on emissions. Ford said that second-quarter sales jumped ahead of the rollout of the new standards in certain areas of the country. Both of its joint ventures also have taken steps either to clear existing inventory or to upgrade existing models of vehicles that don’t meet the new, tougher standards.
Ford’s stock traded down about 0.2% in Monday’s premarket, at $10.18 in a 52-week range of $7l.41 to $11.26. The stock’s 12-month price target is $10.73.