Ford Continues to Face Tough Road Ahead in China

Ford says sales in 2019 of its cars and trucks in China fell for a third straight year, with not many signs of improvement in 2020.
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Ford (F) - Get Report on Monday reported that sales of its cars and trucks in China fell for a third straight year in 2019, with not many signs of improvement in 2020.

The Dearborn, Mich.-based auto giant sold 567,854 vehicles last year in China, down 26.1% from a year earlier, the company said in a statement.

While better than 2018’s 37% decline, the total number of vehicles sold was less than half of the 1.27 million figure reached in its peak year of 2016, Ford said. Sales dropped 6% in 2017.

“The pressure from the external environment and downward trend of the industry volume will continue in 2020, and we will put more efforts into strengthening our product lineup with more customer-centric products and customer experiences to mitigate the external pressure and improve dealers’ profitability," said Anning Chen, president and CEO of Ford Greater China.

At issue for Ford and other American automakers operating in China - like General Motors (GM) - Get Report -are dated product lineups with what is perceived as inferior technology, and difficulties competing not only against Chinese carmakers but also with German and Japanese brands.

The U.S.-China trade war as well as a general economic slowdown are also driving sales lower. Overall auto sales in China fell for a second year in 2019, the China Association of Automobile Manufacturers reported separately on Monday.

Government-imposed requirements to produce electric vehicles is also weighing on carmakers in general. Ford said it plans to launch more than 30 new models in China over the next three years - a third of them will be electric vehicles.

Last month, Ford said it expected its 2019 losses to be roughly half of the $1.5 billion lost in 2018, with an eye toward additional improvement in 2020.

However, the company reported last week that fourth-quarter sales slipped 1.3% from a year earlier, led by a big slump in car sales.

Shares of Ford were down 0.59% to $9.20 in trading Monday.