Ford Sees Record October Sales in China

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- By Mayank Marwah

American carmaker Ford Motor (NYSE:F) has been tirelessly working to make its mark in China, the most attractive destination for automotive giants. The Blue Oval might be classified as a late entrant in this emerging Asian economy, but it is definitely working hard to expand its presence in the mainland. The company sold a record 107,618 vehicles in October, up 14% year over year, powered by strong sales of Mustang, Explorer, New Edge, Focus and Escort.


Peter Fleet, vice president of marketing, sales and service, Asia Pacific, said in a statement, "We had a strong October and we are headed for our best year ever for sales in China." He added, "We are seeing the benefits of a much more exciting lineup and an ever-stronger focus on the wants and needs of Chinese customers."

As far as year-to-date sales are concerned, Ford, Changan Ford and Jiangling Motor Corp. delivered a total of 966,000 cars and vehicles. This is up 10% from the same period last year. Here's a comprehensive look at Ford's performance in October.

Ford continues to build momentum

The sales of Changan Ford amounted to 82,368 units, up 10.1% from the same period last year when it sold 74,820 units. Moreover, through the 10 months of the year, CAF delivered 745,650 units, up 14% as compared with the last year's comparable period.

The company's commercial vehicle investment in China, Jiangling Motors Corp. (000550.SZ), witnessed a 29% sales increase year over year to 23,949 vehicles. In addition, sales from January to October exceeded 200,000 units, up 3% compared to last year.

Lincoln brand sales spiked 6.9% to 9,069 units sold. In contrast, sales of MKC cars and MKS SUVs dropped 29% and 3.3% respectively. Moreover, sales of MKX SUV and MKZ car surged 4.1% and 3.1%.

Ford brand sales posted a sales slump of 12.5% year over year to 179,744 units. While Transit truck sales climbed 9%, sales of Ford Focus, Explorer SUV, Escape SUV, Fusion car and Transit Connect trucks plunged 43%, 14.1%, 4.9%, 21% and 61.5% respectively. By contrast, imported Ford vehicles saw sales improve 0.46% year over year to 1,303 vehicles.

Looking ahead

The October sales growth in China marks the fourth consecutive month of continuous improvement for Ford. The company has managed to pull up numbers in the later months of the year, particularly after witnessing a rough patch at the beginning of the year on account of competition from China's homegrown carmakers. Domestic competition impacted the sales of Ford Kuga.

However, Ford was quick to respond to the rising competition from domestic players. The company's strategic team implemented cost-cutting measures that helped it make price adjustments without hurting the margins much. This enabled the Blue Oval to combat the competitive rates offered by domestic players. This was visible in Ford's equity income from its Chinese joint venture, which came in around $320 million for the quarter. This is an improvement of 26% from last year.

Ford's chief executive officer is confident that the company will keep the momentum going and finish the year on a high note. The automaker has started launching the face-lift version of Kuga and Mondeo. This should support the company's sales volume in the last quarter of the year. The company has taken effective steps and is seeing the results. Ford looks to be on track to post impressive performance in China. Stay tuned for the company's November figures.

Disclosure: I do not hold any position in the stock(s) discussed in this article.

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