Changan Ford, the American automaker’s Chinese joint venture, has begun the process of laying off “thousands,” of its workers following a downturn in automotive sales in the country, according to The New York Times.
The report alleges that three of Ford’s plants in the Chongqing region have been running at less than one fifth capacity and that the average car factory in China is currently operating at “little more than half capacity,” or sometimes even less. It did not indicate how many employees are being laid off, although Changan Ford currently employs around 20,000 workers.
Car sales in China fell 18 percent year over year in January this year. Ford had a particularly rough month, with sales falling nearly 70 percent in January 2019 compared to January 2018.
American automakers are struggling to find their niche in China, where many consumers prefer the engineering and image of a German luxury car or the entry-level price of a locally made Chinese car. Ford is responding to this trend with the inexpensive new Territory crossover, which is a rebadged version of a Chinese engineered and built crossover from Jiangling Motors. The Territory costs the equivalent of $16,000 USD in China.
Ford is also hoping to boost sales of its Lincoln luxury brand in China with updated products that will help them compete with brands like BMW, Audi and Mercedes-Benz.
The ride-hailing industry has also taken a bite out of automotive sales, the NYT report alleges, with many young people avoiding the expense of car ownership and opting to use ride hailing apps and public transit instead.
Reuters asked Ford to comment on the NYT report but did not receive a response. Changan Ford could not be reached for comment on the supposed job cuts, either.
(source: The New York Times)