AutoBeta(AutoBeta.net)06/22 Report--

With the continuous decline of China's auto market, the relatively weak Chinese brands are under great pressure and their market share continues to shrink. However, the performance of the more mature foreign brands in the Chinese market is not all plain sailing, and Ford is one of them. Ford has suffered a major blow in the Chinese market this year.

On June 5, the State Administration of Market Supervision decided to punish Changan Ford Motor Co., Ltd. for implementing the vertical monopoly agreement and imposed a fine of 162.8 million yuan on Changan Ford. On the same day, the share price of Changan Automobile once tumbled more than 7%, closing down 4.42%, and the market capitalization fell nearly 1.5 billion yuan.

On June 10th, Changan Ford's parent company, Changan Motor, released sales figures showing that Changan Ford sold 7418 vehicles in May, a drop of 75.57%.

According to data, Ford's global revenue in 2018 was $160.338 billion, up 2.3% from a year earlier, while net profit was $3.677 billion, down 52.4% from a year earlier. Among them, Ford's loss in the Asia-Pacific region reached 1.1 billion US dollars, or about 7.4 billion yuan. In terms of sales, Ford sold 752000 vehicles in China in 2018, down 36.9 per cent from a year earlier, while Changan Ford, the core of its business in China, sold only 417000 vehicles, down nearly 50 per cent.

In 2016, Changan Ford's sales were close to the million mark, and sales figures show that 2016 was the peak of Changan Ford's sales, with annual sales reaching 957000 vehicles, only one step away from the industry's recognized million-year sales threshold for first-tier brands.

Over the next two years, Changan Ford suffered a "great retrogression". In 2017, annual sales were 827000, down 14 per cent from a year earlier; in 2018, annual sales were 378000, down 54 per cent from a year earlier.

This year's figures seem even more unavailable: from January to May, Changan Ford sold 59000 vehicles, down 70 per cent from a year earlier.

This is the biggest blow that Changan Ford has suffered in the 18 years since its establishment, and such a blow has caused heavy losses to Changan Motor.

According to the Changan Automobile Annual report, the net profit of Changan Ford reached 12.17 billion yuan and 18.17 billion yuan in 2017 and 2016, respectively. Changan Ford's operating income in 2018 was 49.75 billion yuan, and its net profit was negative 800 million yuan. Dragged down by Changan Ford, the net profit of Changan Automobile was minus 3.17 billion yuan, the first loss in nearly 20 years.

In the first quarter of this year, the net profit of Changan Automobile belonging to shareholders of listed companies was negative 2.1 billion yuan, far lower than the net profit of 1.39 billion yuan in the same period in 2018.

Now, in the case of a serious decline in sales, Changan Ford is also facing the time point of switching between the sixth and fifth countries. Under the mandatory requirements of the sixth national standard, Changan Ford is faced with the problem of unsalable vehicles of the fifth car, and is forced to sell models that do not conform to the sixth national standard. At the same time, dealers also face the pressure of destocking and are more cautious about entering the car. As a result, Changan Ford's sales are likely to decline further.

At a time when Changan Ford is facing a severe situation, Ford China held a strategy conference on April 3 to announce the Ford China 330 Plan, saying that it would launch more than 30 new models within three years, including Ford brand, Lincoln brand and new energy models. And accelerate the implementation of this plan by building four major centers, including China Innovation Center, China Design Center, China Product Center and China New Energy vehicle Center.

For Ford China, this "330 plan" is an "error correction" for previous strategic failures. However, the 330 plan is only aimed at the weak products of its models and the lack of long-term planning for the overall product planning. But at present, the 330 plan, which iterates to launch new cars and uses three years to "return to the track" on new products, is still a little thin in the current market pattern.

During the downturn of Changan Ford, auto analyst Zhao Wei believes that Changan Ford has missed the best opportunity and needs to make more efforts to get back to the top.

Although Ford has launched a series of planned measures, it is still a bit weak to reverse the decline and even return to the top. As for the effect of the 330 plan, we will wait and see!

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