Ford sales in China were down 6% in July. The maker's results mirror those of its competition.
Ford Motor Co. and its Chinese joint ventures reported a 6% sales decline compared with year-ago results, the U.S. carmaker said, reinforcing the growing evidence of a slowdown in demand for new vehicles in what has become the world’s largest car market.
General Motors, Volkswagen, Toyota, Hyundai and BMW have all reported that sales dropped across China during July even as manufacturers were forced to deploy price cuts and other incentives to hold on to business. So far only, Mercedes-Benz, which for the past two years has been aggressively shoring up its position, reported a modest increase in sales.
GM has insisted it will be able to maintain strong profit margin on vehicles sold in China despite the spread of discounting but BMW executive have acknowledged the downturn in the Chinese market will have an impact on the company’s finances.
Ford sales are down 0.7% through the first seven months of 2015, compared to the same period a year ago, following on a 3% decline in June and a 4% rise in May.
(GM sees sales fall in China last month. For more, Click Here.)
The China Association of Automobile Manufacturers suggests July sales overall are expected to decline more severely than June’s 2.3% drop.
Last month, a top Ford executive predicted industry-wide sales will be flat or fall in China this year for the first time in years. With seven months of 2015 in the books, Ford expects sales of 23 million to 24 million vehicles in China, compared with 24 million last year. “At best we’re saying flat, probably down,” Ford’s Chief Financial Officer Bob Shanks told the BBC.
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The downturn in the Chinese new car market, which has grown rapidly over the past decade, is coming against a backdrop of a broad slowdown in the Chinese economy, which appears over burdened by debt and weak banking system.
China’s stock markets have tumbled in recent weeks in the face of a major correction that has wiped out more than a third of their value despite efforts by the central government’s efforts to intervene.
(BMW profits fall as China sales soften. Click Here for the story.)
On the plus side, China’s overall economy has benefited from falling energy prices on global markets and rising incomes in major urban areas.