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Ford Motor Company (NYSE: F) said that its sales in China were down 55% in November, despite the launch of two new models tailored to Chinese tastes.
Ford has been working for about a year on a turnaround effort for its once-promising China operation, which has fallen on hard times as Ford's product cadence hasn't kept up with rivals'. In addition to its own troubles, Ford is now facing a big external headwind: After years of growth, China's new-car market is weakening.
The Focus has been one of Ford's best-sellers in China, but an all-new version didn't help in November. Image source: Ford Motor Company.
China's mass market is slipping, but luxury is holding up
China's overall market for "light vehicles" (cars, pickups, SUVs, and small vans) was down 16% year over year in November, with fewer than 2.2 million vehicles sold. Year to date through November, it's down 2.8% to around 21.5 million vehicles sold.
But the decline isn't spread evenly across the market. While mainstream brands like Ford are hurting, luxury brands -- including Ford's own Lincoln brand -- are doing better.
| Automaker | Nov. 2018 | Change vs. Nov. 2017 | YTD 2018 | Change vs. YTD 2017 |
|---|---|---|---|---|
| Ford | 52,434 | (55%) | 695,028 | (34%) |
| General Motors' (NYSE: GM) joint ventures | 361,940 | (18%) | 3.6 million | (1%) |
| Volkswagen brand | 304,700 | (8%) | 2.82 million | (0.5%) |
| Geely brand | 129,340 | (8.4%) | 1.4 million | 29% |
| BMW Group | 60,990 | 10.3% | 577,058 | 6.4% |
| Mercedes-Benz | 52,151 | 2.6% | 603,089 | 12% |
| Audi | 57,721 | 2.7% | 597,451 | 13% |
| Lincoln | 5,216 | 3% | 49,586 | 3% |
Data sources: The automakers, Automotive News. Note that figures for GM include only the vehicles sold by its two joint ventures with Chinese automakers. GM also sells vehicles imported from other parts of the world in China; sales results for those are reported quarterly.
As you can see, it's kind of a tale of two worlds. While GM and VW are doing better than Ford, both saw sales decline by double-digit percentages in November, as did domestic Chinese powerhouse Geely. But the luxury brands all managed to post gains. (GM's figures include a small number of Cadillacs; it's likely that the Cadillac brand also managed a gain in November, but we won't know for sure until GM reports full results in January.)
Unfortunately for Ford, Lincoln sales are still just a small portion of its overall sales in China (though the portion is growing as Ford sales decline). That leads us to the big question: Why were Ford-brand sales down so much in November?
All-new compacts don't seem to be helping yet
The short answer is that we don't really know what happened to Ford in China last month, because Ford has sharply reduced the amount of information it releases on its sales in China. Specifically, Ford no longer shares model-by-model sales results for China.