Ford is accelerating the output of its vehicle offerings in China.
As China’s automotive sales have slumped, Ford and General Motors are taking their lumps with Ford’s sales falling 21.7% in the first quarter and GM seeing a 12.2% decline during the same period.
Ford’s results were in improvement over its first quarter tally, when sales dropped 35.8%. GM, which is China’s second-largest automaker, also showed an improvement over its Q1 results, which fell 17.5% during the first three months of 2019.
Ford is still suffering from a limited model line-up, while GM got tagged from stiff competition for its mid-priced sport-utility vehicles that are so popular in China right now, much like the U.S. GM delivered 1.57 million vehicles in China in the January-June period this year, while Ford delivered 290,321 vehicles.
Ford is still in the early stages of its “Ford China 2.0” strategy, which it unveiled in early April. The plans call for some restructuring of the business and an onslaught of new products during the next year or so to give Ford and Lincoln a completely made over or refreshed set of offerings in China.
(Ford China 2.0: Automaker Begins Second Act in China)
The company’s short-term response to the poor sales includes aggressively reducing dealer inventory, increasing showroom traffic, stabilizing transaction prices and improving dealer profitability, the company noted. Dealers’ day supply ended the month at 28 days, the lowest level in the past 18 months.
Recent named Ford China President Anning Chen lays out the tenets of Ford China 2.0.
GM is using part of the same playbook: offering new or refreshed models, especially in the aforementioned midsize SUV segment. Two new Buick SUV models, the all-new Encore and Encore GX, will go on sale next week.
Chevrolet will add the Trailblazer in the second half to its SUV lineup, as it continues to enhance its product mix. In all, it is introducing a record of about 20 new and refreshed models in China this year, which are all China 6 compliant. Around two-thirds will arrive in the second half, with a sharpened focus on luxury vehicles and midsize and large SUVs, the company notes.
However, what Ford and GM have been unable to resolve is the problems stemming from the ongoing trade issues between the U.S. and China. China’s factory activity shrank more than expected in June, according to Reuters, highlighting the need for more economic stimulus amid higher U.S. tariffs and weaker domestic demand.
Manchester United superstar Ryan Giggs helped introduce the latest Chevy Malibu in China. It hasn’t helped, GM sales tumbling in the Chinese market.
Annual car sales in China fell last year — the first time in two decades — and will likely fall again this year. Overall, the China Association of Automobile Manufacturers (CAAM) said sales have fallen for 11 consecutive months, including slides of 16.7 in May, 14.6% in April and 5.2% in March.
U.S. car companies are taking the brunt of the decline this year, with total China passenger vehicles sales falling to 9.6% in the first five months of this year from 10.9% in the year-ago period, according to CAAM. During the same period, German carmakers have seen their share rise to 23.3% from 20.9% and Japanese automakers to 21.3% from 17.3%.
(China Car Sales Tumble for 10th Consecutive Month)