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Ford deliveries slump 21%
Automotive News China | 2017/4/14

BEIJING -- Ford Motor Co.'s China sales fell 21 percent year on year in March to 90,457 vehicles, a downturn that company executives attributed to the central government's higher sales tax on small-engine vehicles. The total excludes Lincoln sales, which are reported quarterly.

Ford trailed many of its competitors. For the month, the China Association of Automobile Manufacturers reported a 1.7 percent increase in overall light-vehicle sales. (See article in today's newsletter.)

In March, Ford-brand sales by Changan Ford Automobile Co. plunged 30 percent to 59,212 vehicles, but Jiangling Motors Corp. -- the Ford partnership that sells the Transit van and other commercial vehicles -- recorded a 3 percent gain to 29,734. Ford Motor's import sales rose 1 percent to 1,511 vehicles.

For the first three months, Ford Motor's China deliveries, excluding Lincoln, declined 21 percent to 243,530 vehicles.

For the first quarter, Lincoln continued to grow, with sales up 114 percent from a year earlier to 11,731 vehicles.

Many in the industry had feared that a tax increase on Jan. 1 would lead to weaker sales in the first few months of the year.
 
Roughly 70 to 75 percent of Ford cars sold in China qualified for the tax cut, which applies to vehicles with engine capacity of 1.6 liters or smaller, Ford CEO Mark Fields told reporters in Shanghai on Saturday.
 
"We've always planned for the fact that [in] the first quarter there would be payback from the pull forward of sales into the fourth quarter" before the incentive was reduced, Fields said, adding that sales would improve for the rest of the year.
 
The purchase tax for small-engine cars climbed to 7.5 percent this year from 5 percent in 2016 after the government stepped in to stimulate slumping sales. The tax will return to the 10 percent rate next year. 

Ford said in a statement that sales of its vehicles that do not benefit from the purchase tax incentive rose 21 percent in the first quarter from a year earlier.


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