Ford to Reshuffle China Business as Long Shot to Reverse Fortunes

Cars and Drivers

Published: October 24, 2018 7:20 am

Last Updated: January 11, 2020 3:57 pm

Ford Motor Co. (NYSE: F) sales have been hammered in China. On top of that, the once rapidly growing car market, the world’s largest, has stopped growing. Ford is in a battle for market share, while many of its products in the market lack appeal. Ford hopes for a turnaround in China via a reorganization, which does not seem to address the core problem.

Anning Chen will become CEO of Ford China. Out is Peter Fleet, who takes the fall for problems not entirely of his making. He will keep oversight of the balance of Asia, which is a very modest position.

Ford explained the moves as steps “to accelerate a return to profitable growth.” It will take more than just one person to accomplish that. Embattled Ford President and CEO Jim Hackett explained his decision:

Success in China is critical as we reposition our global business for long-term success. With today’s actions, we are strengthening our commitment to the China market and reorganizing our international markets to strengthen their performance.

Ford’s September sales in China were down 43% to 64,383. For the first nine months of 2018, they totaled 585,171 units, a 30% decrease year over year. It was Fleet’s last month in charge and his assessment was upbeat: “We believe the new products, which have been custom-designed and developed with Chinese customers in mind, will help us to regain momentum in the world’s largest auto market.”

Not upbeat enough for him to keep his job.

Chen has the Sisyphean task of making Ford China into something it cannot be, even with new models and a new executive suite. Every major car company in the world wants a piece of China’s 27,000 plus annual sales. That number was 8 million only a decade ago. However, experts believe the figure could remain shy of 30,000 for years. Market leader General Motors will be a fierce guard of its leadership positions. The major Japanese and German car manufacturers will do the same. And Tesla joined the race at the high end, a challenge to Ford’s Lincoln division.

Ford is stuck in reverse in China. A changing of the guard won’t do much.