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Ford Should Exit Chinese Auto Market Amid Falling Profits: Analyst

In recent years, Ford has completely revamped its strategy in the hyper-competitive Chinese auto market, scrapping its previous approach of designing vehicles specifically for customers there and instead building existing models locally while also importing others. However, aside from the fact that the Ford Mustang Mach-E has thus far failed to make inroads in China as it faces heavy competition in the EV segment, at least one analyst thinks that the automaker should just exit that same market altogether.

S650 Ford Mustang Lineup China - Exterior 001 - Front

“I think you have to see the [Detroit Three] exit China as soon as they possibly can,” Bank of America Securities analyst John Murphy stated during a recent presentation, according to Reuters. “Very aggressively manage your core business. And it’s really some tough medicine. There’s a lot of really hard work to do here.”

During his presentation, Murphy touched on the extreme cost-cutting measures American automakers would have to implement in order to be competitive in the Chinese auto market, which he doesn’t believe is a path to prosperity. He added that this problem is further compounded by the extreme loyalty Chinese citizens show toward domestic brands, and that may only grow following the implementation of higher tariffs recently imposed by the U.S. on imported Chinese vehicles and raw materials. In fact, as the European Union mulls a similar type of action, China may even go so far as to retaliate and impose higher tariffs of its own.

Ford Ranger 1st Edition China - Exterior 001 - Front Three Quarters

While Ford has begun to largely transform its Chinese operations into more of an export hub – with the 2024 Lincoln Nautilus serving as a solid example of that – it’s also developing a lower-cost EV platform set to underpin a variety of cheaper models in the near future, at least one of which was inspired by a trip to China that Ford CEO Jim Farley took recently.

We’ll have more on Ford’s operations from around the world soon, so be sure and subscribe to Ford Authority for 24/7 Ford news coverage.

Brett's lost track of all the Fords he's owned over the years and how much he's spent modifying them, but his current money pits include an S550 Mustang and 13th gen F-150.

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Comment

  1. Mark B

    Another aspect of the Chinese economy is that their government is heavily invested in almost every business sector, so profitability may be less of issue as far as operating capitol is concerned. Not quite the way most free world economies operate.

    Reply

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