As Sales Plunge, Ford Tries Again With China

Ford isn’t about to kiss off the barely tapped potential of the Chinese new vehicle market, so it’s throwing more effort into strengthening its efforts in that “developing” country. To better mine a market in which its sales sank 43 percent last month, the automaker has announced the creation of a standalone business unit: Ford China.

Overseeing the unit is a CEO poached from a Chinese automaker — a man who once spent 17 years working under the Blue Oval banner.

In its Wednesday announcement, Ford said former Chery CEO Anning Chen would take on the top executive position for Ford China. Chen left Ford in 2009 after having served since 1992, soon appearing at China’s state-owned Chery Automobile Co., where he reached the general manager position in April 2017.

Chen resigned from Chery at the end of September for personal reasons, according to a company statement. In his new position, Chen will report directly to Jim Farley, Ford’s head of global markets.

“Success in China is critical as we reposition our global business for long-term success,” said Ford CEO Jim Hackett in a statement. “With today’s actions, we are strengthening our commitment to the China market and reorganizing our international markets to strengthen their performance.”

Farley echoes Hackett’s sentiment, stating, “China is absolutely essential to Ford’s profitability and growth,” said Farley, claiming a standalone unit was needed to ” increase our decision-making speed and be closer to our customers.”

Chen’s first day on the job is November 1st. Helping him transition into the role is Peter Fleet, president of Ford Asia Pacific, who’s also tasked with the creation of an International Markets business unit focused on the non-China Asia-Pacific region and other unspecified markets.

Ford’s Chinese market share hit a peak of 4.36 percent in 2015, falling nearly a full percentage point by 2017. A rapidly transitioning market with its own domestic troubles was made all the more volatile by U.S. tariffs levied this summer, leading to a steep nosedive in volume.

The automaker’s aforementioned 43 percent year-over-year sales drop in September was only the latest reason for a rise in antacid sales in Dearborn. August saw a 36 percent monthly sales drop, while July’s volume came in 32 percent lower than the same month a year prior. June sales fell 38 percent. If this looks like a worsening trend that would weigh on the minds of investors, you’re right.

Ford plans to launch 50 new models in the Chinese market by the middle of next decade, all the while increasing its volume of locally produced vehicles.

While news of a new China unit should have brought some lift to the automaker’s deeply depressed stock, a quarterly earnings report expected after Wednesday’s closing bell weighed heavily. As of publication time, Ford’s stock was down nearly 5 percent on anticipation of bad news.

[Image: Ford Motor Company]