- Ford sales in China tanked 43% in September year-over-year.
- The drop is attributed to a confluence of factors, from Ford’s makeover of the company to the Chinese economic slowdown.
- The growing trade war between the US and China also most likely played a role.
- Ford has been dealing with a series of maladies from President Donald Trump’s various tariffs.
Ford’s sales in China nosedived in September as a slew of factors, including President Donald Trump’s trade war and a slowdown in the Chinese economy, slammed the company.
According to data released by the company Friday, overall sales in China fell 43% in September compared with the same month last year and were down 30% through the first nine months of 2018 compared with the same period in 2017.
Sales for each of the company’s Chinese partnerships fell for the month:
- Changan Ford Automobile sales were down 55% in September compared with 2017.
- Jiangling Motors Corporation sales declined 15%.
- Imported Ford sales fell 16% for the month and were down 15% year-to-date.
- The only Ford brand to see positive sales growth was Lincoln, with a 1% gain for September and a 4% gain year-to-date.
The numbers, while more extreme, lined up with the general collapse in Chinese auto sales during the month. According to the China Association of Automobile Manufacturers, sales in the country tumbled 11.6% year-over-year in September, the largest drop in seven years.
There are numerous explanations for the collapse in sales for Ford and the Chinese auto market in general:
- China’s economy has slowed in recent months, with the International Monetary Fund marking down gross-domestic-product growth projections for the country and investment in infrastructure and businesses also slowing.
- Another problem is the growing trade war between the US and China, which may be partly to blame for the slowdown. In particular, cars from both countries are now subject to tariffs, making it more expensive to import autos from the US to China and vice versa.
- Ford has warned the increased costs could depress sales, and the trade uncertainty contributed to the company’s profit forecast cut in July.
- Additionally, while overall growth slowed in 2017, car sales in China were strong for the year.
Add up all of those elements, and you end up with the sales disaster.
The collapse in Chinese sales isn’t the only trade-related problem for Ford. CEO Jim Hackett revealed that Trump’s decision to impose tariffs on steel and aluminium coming into the US would cost the company $US1 billion in 2018 and 2019.
The company also decided not to import a new SUV from China to the US, citing the trade war as the reason for the decision.
The trade war is exacerbating longstanding issues at the automaker, which is already carrying out a global restructuring. As part of the changeover, the company announced Monday that it would lay off a significant number of workers.
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