Ford sales are up 6% in China in the first half of the year due to the popularity of its SUVs and crossovers, like the new Edge.
Ford and its joint ventures in China increased sales by 15% in July, giving the company a bit of good news after a spate of disappointing financial and sales reports from other parts of the globe, including key market in North America.
Year-to-date sales for Ford, Changan Ford and Jiangling Motor Corp. total 652,836 vehicles, up 6% compared with the same time last year.
July sales for CAF, Ford’s passenger car joint venture, increased 20% compared to July 2015. Year-to-date sales for CAF accelerated past the half million mark with 503,719 vehicles sold, up 11% compared with last year.
CAF’s strong performance was led by the Ford Escort, which saw July sales up 82%, and the new Ford Focus, with monthly sales up 13%.
JMC, Ford’s commercial vehicle investment in China, sold 17,748 vehicles in July, up 6% compared to last year. Year-to-date sales total 139,262 vehicles, down 5%.
The sales numbers from China follow Ford’s second-quarter financial report last month in which profits came in below expectations, dropping 9% as the company’s operations in South America lost money and Ford Credit’s profits fell as the value of used cars coming off lease sold at auction declined.
Ford enjoyed a 15% increase in sales in China. Sales are up 6% of the first half of the year.
Overall Ford reported net income $2 billion in the second quarter, which was down $190 million from a year ago, Total company adjusted pre-tax profit of $3 billion in the second quarter, typically the industry’s most profitable, was down $293 million while earnings per share totaled 49 cents per share, which was down 5 cents per share from a year ago. Revenue was up by $2.2 billion to $39.5 billion.
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The results triggered a gloomy forecast from Bob Shanks, Ford’s chief financial officer, who predicted a broad decline in sales across the industry during the balance of the year.
On July 29 the stock rating was downgraded to “Neutral” from “Buy” and a price target of $13 was set in a statement from Goldman Sachs. Investment analysts at JP Morgan maintained a company rating of “Neutral” and lowered the price expectation to $13 per share from $20 per share. Additionally, Citigroup held the stock rating at “Neutral” and moved down the price target for shares of Ford stock from $16 per share to $13 per share.
(Some analysts think that U.S. auto sales have hit their peak. Click Here for the reasons.)
Ford also was hit by a sweeping recall of more than 830,000 Ford and Lincoln passenger cars sold between 2012 and 2015. The doors on 2013 to 2015 models of the Ford C-Max, and the Ford Escape and 2012 to 2015 Ford Focus, Ford Mustang and Lincoln MKC as well as the 2014 to 2016 Ford Transit Connect vehicles have been targeted by the recall.
The spring tab in the side door latch could break, preventing the door from latching. In certain situations where the door is able to be closed, the door may unlatch while driving, increasing the risk of injury, Ford said in the recall notice.
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In addition, sales of Ford-brand car were down just under 10%, compared with the prior year, and sales of Ford-brand SUVs dropped 5.3%, while Lincoln’s total sales declined 4.6%, leaving only Ford trucks with a gain for July at 4.8% for the month as the company posted an overall sales decline of almost 3% during July.