China Auto Sales: Ford vs. General Motors
- By Mayank Marwah
Ford Motor Co. (NYSE:F) released its first-quarter China sales on April 8.
Quarterly revenue rose on a year-over-year basis thanks to new product launches and localization strategy success. In addition, strong sales at the commercial vehicles and luxury segments helped results.
Detroit-based automaker General Motors Co. (NYSE:GM), which reported sales on April 3, posted a sales growth of 69% on a year-over-year basis to more than 780,000 units in China.
Overview of the quarter
Ford sold a total of 153,822 vehicles in China in the first quarter, which reflected a gain of 73.3% from a year earlier.
Sales of Ford Brand SUVs reached more than 34,000 units, which grew 103.4% compared to the year before, and roughly 140,000 units in 2020, up 32.4% as compared to 2019. Within the segment, Escape sales amounted to nearly 8,400 units in the first quarter.
Lincoln luxury vehicles witnessed a quarterly sales increase of a mammoth 217% on a year-over-year basis to more than 19,300 units, driven by strong performance of Lincoln Corsair and Aviator, making up 75% of the segment's first-quarter sales. Ford China's President and CEO Anning Chen commented on the company's performance:
"Ford continues to deliver on its commitment to offer consumers in China the right mix of locally produced, world-class Ford and Lincoln vehicles. We intend to fully build on these four consecutive quarters of sales growth to meet rising Chinese consumer demand with our Best of Ford, Best of China strategy."
All major General Motors brands posted quarterly growth in China. Wuling and Buick were the best brands in China in terms of volume sold. While the former sold more than 347,000 units, the latter delivered more than 224,000 units.
Road ahead for Ford and GM
General Motors has introduced more than 10 new electric vehicles in the world's hottest car market. The company's new energy vehicle sales in China in 2020 surged four-fold as compared to the prior year. Given the scintillating run NEVs have had in China, the company said more than 40% of the new launches in China in the next five years will be NEVs.
As for Ford, the company struggled to grow its sales in the world's hottest car market for the past few years. The company's sales slipped 37% in 2018, followed by a 26% decline in 2019. The company cited aging model lineup as the reason for the decline.
Fortunately, the Michigan-based automaker recorded 6.1% sales growth for full-year 2020. Additionally, the company registered its third consecutive quarter of sales growth in the region. To keep the momentum going, the company said it will launch new products and adopt localization strategies.
Disclosure: I do not hold any positions in the stocks mentioned.
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This article first appeared on GuruFocus.
