Ford Asks For Patience As It Overhauls China Operations Following Sales Dip

At a time when many other global automakers are reporting month after month of sales growth in China, Ford in January saw its Chinese sales tumble 18 percent vs. January, 2017. Now, Ford Asia Pacific President Peter Fleet is asking investors to “bear with us” as the company enacts several key changes to try and improve its position in the world’s largest automotive market.

“It’s going to be a little bit of a bumpy ride for Ford in China this year,” Fleet told the Detroit Free Press during a telephone interview. “The second half will improve. We have a very clear opportunity in front of us.”

Adding to Ford’s troubles in China is the fact that Ford China CEO Jason Luo resigned last month for unspecified personal reasons, shortly after the automaker reported a 6% slump in sales for 2017. Luo held the position for a brief 5 months. Fleet characterized his sudden resignation as a setback, and says that he is interviewing new candidates for the position, with a successor most likely to be named in June.

But Ford has an even bigger problem on its hands in China: a lack of new product. “That would be relevant in any market but it’s super relevant in China,” Fleet told the Detroit Free Press, explaining that many Chinese buyers are new to car ownership, or looking for a special second car.

“The key is, [many Chinese buyers are] not replacing an existing car. They’re likely looking for the newest, most exciting product. In China, you get a big uptick with a new product. And if you don’t have new product, you pay a little bit of a price for that.”

To that end, Ford is planning to introduce an important new vehicle for the Chinese market at the Beijing Auto Show this April, and last December, the automaker announced plans to build 50 new products in China by 2025, including utilities and EVs tailored to that market. Additionally, the American company is seeking regulatory approval this year to start building and selling small, battery-electric vehicles with its latest Chinese joint venture partner: Zotye Auto.

And finally, Ford says it will swap out much of its executive staff in China for Mandarin-speaking locals.

“We brought in global leaders to run that business,” Fleet said. “Now as the business matures, we’re getting many more Chinese and Chinese-born leaders in positions of authority in the company.”

All of this is important as China remains both the largest and the fastest-growing automotive market in the world. As the Detroit Free Press reports, General Motors has reported consistent growth in the market, surpassing 4 million vehicle sales for the first time in 2017.

Last year, Chinese customers purchased 28.9 million vehicles, versus 17.2 million in the US.