Collapse in China Sales Threatens Ford CEO's Turnaround

Cars and Drivers

Published: July 12, 2018 6:35 am

Last Updated: January 11, 2020 9:09 pm

Ford Motor Co. (NYSE: F) CEO James Hackett has set a broad, ambitious and risky turnaround plan for the flagging carmaker. Almost all his strategy could be challenged by a collapse in sales in China, the world’s largest car market by far. Without the ability to steady sales there, Ford’s plans in the United States and for its autonomous and electric car businesses could be swamped by the lack of success at its core gas-powered auto business.

Ford reported that sales in China dropped a breathtaking 38% in June to 62,057. First-half sales fell 25% to 400,423. While Ford enumerated joint venture and electric car plans in China, these are no comfort against what remains a soft set of strategies to better the problem company. Local management comments are unlikely to improve the perception of the number two U.S. car firm’s prospects. Peter Fleet, president, Ford Asia Pacific and board chair and CEO, Ford China, said as Ford announced its China results:

We always knew it would be a challenging year for us given our position in the product cycle; however, we are intensely focused on our ‘In China, For China’ strategy. As we reposition our business in the market, we are working closely with our partners to strengthen our core business, improve our operational fitness and capitalize on emerging market opportunities.

Ford never let on that a “challenging year” would mean a quarter of its sales would disappear.

Hackett also has to deal with a U.S. market that has swung toward demand for sport utility vehicles, crossovers and pickups. Although it has in its F-Series pickups the top-selling vehicle in America, its car business has been so badly hurt that it will stop selling most of its U.S. car models.

Hackett has set a strategy to cut Ford global costs and to become a leader in electric and autonomous vehicles. Just as his credibility about China is under attack, so are these broader initiatives. Ford cannot be considered at the forefront of either the electric or autonomous car sectors. These are led by a group of tech companies and electric car operations, and squeezed by similar initiatives by every major manufacturer in the world.

China is Hackett’s most immediate problem, and there are no signs he has an answer.

24/7 Wall St.
7 Stocks to Buy Now That Will Outperform and Still Be Relevant in 2025

Are You Still Paying With a Debit Card?

The average American spends $17,274 on debit cards a year, and it’s a HUGE mistake. First, debit cards don’t have the same fraud protections as credit cards. Once your money is gone, it’s gone. But more importantly you can actually get something back from this spending every time you swipe.

Issuers are handing out wild bonuses right now. With some you can earn up to 5% back on every purchase. That’s like getting a 5% discount on everything you buy!

Our top pick is kind of hard to imagine. Not only does it pay up to 5% back, it also includes a $200 cash back reward in the first six months, a 0% intro APR, and…. $0 annual fee. It’s quite literally free money for any one that uses a card regularly. Click here to learn more!

Flywheel Publishing has partnered with CardRatings to provide coverage of credit card products. Flywheel Publishing and CardRatings may receive a commission from card issuers.