Ford/Lincoln sales growth in China

[Gurgeh]

Finally, some good news for Ford and Lincoln in China, especially in the 4th quarter.

-----------------------

"Ford Motor Company (NYSE:F) said on Wednesday that its sales in China rose 30% in the fourth quarter from a year ago, as its revamped product line and SUVs from its Lincoln luxury brand continue to gain traction with Chinese consumers. 

For the full year, Ford's sales in China were up 6.1% from its grim 2019 result, despite the impact of the COVID-19 pandemic. 

 

"...Lincoln has once again become a bright spot for Ford in China. The brand's sales rose 75% in the fourth quarter, to roughly 22,600 vehicles, driven by brisk demand for locally made versions of the Corsair and Aviator SUVs. The two together accounted for about three-quarters of Lincoln's China sales in the quarter. Ford said in November that it will begin making Lincoln's midsize SUV, the Nautilus, in China as well. 

 

"Sales of Ford-brand vehicles in China rose 24.7% from a year ago, to over 100,000. Roughly half of those were SUVs, with the new Explorer and Escape accounting for about 22,000 units, the company said."

 

https://www.fool.com/investing/2021/01/13/fords-china-sales-continue-to-rise-on-strong-linco/

Edited January 14, 2021 by Gurgeh

[twintornados]

This shows that the Chinese market is no longer a place for "cast off" designs and they will buy new products when they are really new.

[rmc523]

Here's the Ford PDF:

 

https://s23.q4cdn.com/799033206/files/doc_news/2021/1/12/Ford-China-Fourth-Quarter-Sales-1.12.21.pdf

 

They don't seem to do charts for the Chinese numbers anymore for whatever reason.

 

Year-over-year highlights

• Lincoln brand luxury vehicle sales set new quarterly and full-year records in 2020. Fourth-quarter sales reached more than 22,600 units, up 74.9 percent, while full-year sales exceeded 61,700 units, up 32.5 percent.

---- Sales of Lincoln brand SUVs surpassed 20,500 units in the fourth quarter, up 158.7 percent, and more than 52,500 units in 2020, up 96.3 percent.

---- Locally built vehicles, consisting of Lincoln Corsair and Aviator, accounted for 76 percent of overall sales in the fourth quarter and 64 percent for the full year.

• Ford brand vehicle sales in the fourth quarter reached nearly 104,000 units, up 24.7 percent, and more than 324,000 units in 2020, down 1.2 percent compared to 2019.

---- Ford brand SUVs sold approximately 50,000 units in the fourth quarter, up 86.5 percent, and approximately 140,000 units in 2020, up 32.4 percent. The new Ford Explorer and Escape sold approximately 10,000 units and 12,000 units, respectively, in the fourth quarter.

---- National Sales and Service Division sold more than 74,000 units in the fourth quarter, up 19.1 percent, delivering its second-consecutive quarter of year-overyear sales growth. Full-year sales exceeded 234,500 units on strong recovery from the COVID-19 pandemic. Mix of near-premium sedans and SUVs reached nearly 55 percent of total sales in 2020, up from 30 percent in 2019.

---- Ford Lio-Ho achieved its best quarterly sales since 2007, with more than 9,500 vehicles sold in the Taiwan market in the fourth quarter, up 60.1 percent. Fullyear sales exceeded 28,700 units, up 39.2 percent, driven by strong demand for the all-new Ford Kuga and Focus, which registered full-year sales increases of 166 percent and nearly 30 percent, respectively.

• Commercial vehicle sales exceeded 83,200 units in the fourth quarter, up 31.4 percent, and 271,200 units for the full year, up 15.4 percent compared to 2019.

---- Strong demand for Ford Transit commercial vans continued in the fourth quarter with sales of nearly 17,600 units, up 37.4 percent, and more than 51,000 units in 2020, up 33.5 percent.

---- JMC brand commercial vehicle sales exceeded 64,300 units in the fourth quarter, up 28.2 percent, and more than 216,400 units in 2020, up 12.2 percent. Pickup sales surpassed 18,000 units in the fourth quarter, up 25.7 percent, and approximately 61,000 units for the full year, up 2.5 percent. Light truck sales in the fourth quarter exceeded 33,000 units, up 36.0 percent, and 115,000 units in 2020, up 22.5 percent.

[rmc523]

Hopefully this represents them finally turning a corner in China.

[bzcat]

Context is everything.

 

Brand Q4 sales / 2020 sales

Ford 104k / 325k

Lincoln 23k / 62k

JMC 64k / 216k

Total 191k / 603k

 

Ford now reports results from Ford Taiwan with Ford China so part of the sales increase has nothing to do with China at all.

 

Ford sold 104k units of Ford brand vehicles in its China business unit in the 4th quarter (which apparently includes 10k unit in Taiwan) - sounds great until you read that GM sold over 125k units of its Baojun brand, 290k units of Buick brand, and 370k of Wuling brand in the same period (Chevy and Cadillac combined for another 185k). I'm just using GM as a comparison because the data is readily available... Ford is really minor player in China now having whiffed on the critical expansion stage from 2016-2019 when Toyota, Honda, and Hyundai all roughly doubled their sales in China and took market share away from Ford.

 

The sales increase in 4th quarter is encouraging but still lags all other major car companies. Farley needs to let Ford China develop and grow its business to avoid circling the drain like it did in pretty much everywhere else.

 

 

Edited January 14, 2021 by bzcat

[bzcat]

4 hours ago, twintornados said:

This shows that the Chinese market is no longer a place for "cast off" designs and they will buy new products when they are really new.

 

That has been the case at least since 2010. Chinese market moves at warp speed - anything older than 2 years is considered ancient.

 

Remember, Ford Focus was actually the #1 selling model in China for several years and when combined with Escort, Ford was a dominant force in the compact car segment. But Ford did nothing with those two models for 7 years when competitors programed 18 month facelift cycles. By 2018, Ford basically couldn't give either cars away.

[rmc523]

58 minutes ago, bzcat said:

Context is everything.

 

Brand Q4 sales / 2020 sales

Ford 104k / 325k

Lincoln 23k / 62k

JMC 64k / 216k

Total 191k / 603k

 

Ford now reports results from Ford Taiwan with Ford China so part of the sales increase has nothing to do with China at all.

 

Ford sold 104k units of Ford brand vehicles in its China business unit in the 4th quarter (which apparently includes 10k unit in Taiwan) - sounds great until you read that GM sold over 125k units of its Baojun brand, 290k units of Buick brand, and 370k of Wuling brand in the same period (Chevy and Cadillac combined for another 185k). I'm just using GM as a comparison because the data is readily available... Ford is really minor player in China now having whiffed on the critical expansion stage from 2016-2019 when Toyota, Honda, and Hyundai all roughly doubled their sales in China and took market share away from Ford.

 

The sales increase in 4th quarter is encouraging but still lags all other major car companies. Farley needs to let Ford China develop and grow its business to avoid circling the drain like it did in pretty much everywhere else.

 

 

 

Interesting to note the Taiwan inclusion vs. not before.

 

Well, we've seen some China-centric products seemingly in development, so hopefully that helps things.

[bzcat]

2 hours ago, rmc523 said:

 

Interesting to note the Taiwan inclusion vs. not before.

 

Well, we've seen some China-centric products seemingly in development, so hopefully that helps things.

 

I think Taiwan got lumped into China business unit because it is the only LHD market in the Asia Pacific region that Ford has significant presence. Ford is pretty much a lost cause in Korea, Philippine, Vietnam - the other three LHD Asian markets that Ford has a token presence.

 

China-centric products is good idea but let's wait and see if Ford can keep up with the 18 to 24 months model cycles that competitors are running with in China. 

Edited January 14, 2021 by bzcat

[jpd80]

Factoid,

Last quarter Lincoln sold as many Corsairs and Nautilus in China as it normally does in the USA.

Commencing production of Nautilus in China is interesting and gives the brand opportunity to grow.

 

[rmc523]

3 hours ago, jpd80 said:

Factoid,

Last quarter Lincoln sold as many Corsairs and Nautilus in China as it normally does in the USA.

Commencing production of Nautilus in China is interesting and gives the brand opportunity to grow.

 

 

I'm curious if they lowered prices too since they don't have to import anymore, or if they maintained pricing (which would mean more profit)?

[jpd80]

3 hours ago, rmc523 said:

 

I'm curious if they lowered prices too since they don't have to import anymore, or if they maintained pricing (which would mean more profit)?

The whole point of building locally is to avoid import tax and of course, shorten the wait for delivery.

Less tax equals lower price which should mean more sales, well that's the hope anyway.....

[rmc523]

9 hours ago, jpd80 said:

The whole point of building locally is to avoid import tax and of course, shorten the wait for delivery.

Less tax equals lower price which should mean more sales, well that's the hope anyway.....

 

I understand that - my point is if the market was sustaining that higher price, they could theoretically keep the price at that higher level, while making more profit while they're not having to pay the import tax.

 

But conversely they can also increase sales by just lowering the price without the import tax.

[jpd80]

37 minutes ago, rmc523 said:

 

I understand that - my point is if the market was sustaining that higher price, they could theoretically keep the price at that higher level, while making more profit while they're not having to pay the import tax.

 

But conversely they can also increase sales by just lowering the price without the import tax.

The Chinese government still gets 50% of all profits so probably no reason to drop the price.

 

[slemke]

6 hours ago, jpd80 said:

The Chinese government still gets 50% of all profits so probably no reason to drop the price.

 

Well, they do need to be competitively priced compared to rivals.  But having 50% of your profits taken by another entity makes the business case that much tougher.  It isn’t the Chinese government taking the profit, it is the local Chinese company whose affiliation with the government is sometimes hard to distinguish.  Sure would be nice for international companies to be independent when operating in China.

[jpd80]

3 minutes ago, slemke said:

Well, they do need to be competitively priced compared to rivals.  But having 50% of your profits taken by another entity makes the business case that much tougher.  It isn’t the Chinese government taking the profit, it is the local Chinese company whose affiliation with the government is sometimes hard to distinguish.  Sure would be nice for international companies to be independent when operating in China.

The local businesses are fronts for the Chinese government, it's a facade draped over an all seeing all controlling monster.

[slemke]

1 minute ago, jpd80 said:

The local businesses are fronts for the Chinese government, it's a facade draped over an all seeing all controlling monster.

I call it China inc.  It’s like one big conglomerate with competing entities.  Not an efficient use of capital, but turns enough profit to wreak havoc for everyone else.  My fear is China becoming a global monopoly.  Use government ownership of everything to capture foreign investment and IP, undercut on price elsewhere in the world to eliminate the competition and then use that control to monopolize.  Hopefully it can be controlled before it is too late.

 

 

[jpd80]

17 hours ago, slemke said:

I call it China inc.  It’s like one big conglomerate with competing entities.  Not an efficient use of capital, but turns enough profit to wreak havoc for everyone else.  My fear is China becoming a global monopoly.  Use government ownership of everything to capture foreign investment and IP, undercut on price elsewhere in the world to eliminate the competition and then use that control to monopolize.  Hopefully it can be controlled before it is too late.

 

 

Like everything the Chinese do, it's all about image to the West but scratch the surface and question the motives 

behind the moves and it's all about keeping money and development in China while having a huge low cost supplier 

network to western economic centers who then  follow the capitalist model of maximizing profits by importing the

cheapest resources and finished products. They use our own system against us.

 

Edited January 17, 2021 by jpd80

[snooter]

I think ford needs to give thought to the problems associated with dealing with the communistic chinese gov't....the worlds largest market is not something that should be entered into without prudence....it might be best for ford to stay small and go slow with growth oriented business decisions....with fords quality being an issue they they need to fix there crap here first

[jpd80]

7 minutes ago, snooter said:

I think ford needs to give thought to the problems associated with dealing with the communistic chinese gov't....the worlds largest market is not something that should be entered into without prudence....it might be best for ford to stay small and go slow with growth oriented business decisions....with fords quality being an issue they they need to fix there crap here first

This is basically what has happened to Ford but their already aged vehicle designs was a big issue and caused shot interest amongst the Chinese who are always looking for the newest vehicles.  Ford wants stronger sales in China but operates in slightly different regions to the main/ top selling brands but there’s no reason not to push a bit more and see what can be done

[bzcat]

On 1/16/2021 at 1:44 AM, jpd80 said:

The whole point of building locally is to avoid import tax and of course, shorten the wait for delivery.

Less tax equals lower price which should mean more sales, well that's the hope anyway.....

 

Locally assembled Lincoln had substantial price reduction from their previous imported versions. 

 

Local assembly also allows Ford to modify the vehicles to better cater to local tastes and demands - Chinese consumers are a lot more demanding and picky about the interior material quality than US customers. 

[FordBuyer]

On 1/16/2021 at 10:20 PM, slemke said:

Well, they do need to be competitively priced compared to rivals.  But having 50% of your profits taken by another entity makes the business case that much tougher.  It isn’t the Chinese government taking the profit, it is the local Chinese company whose affiliation with the government is sometimes hard to distinguish.  Sure would be nice for international companies to be independent when operating in China.

So what is the profit margin for Ford in China even in a good year? 2%? And on top of that like Korea, they copy you and build it cheaper. The new Sorrento looks like the Explorer for a cheaper price for example.

 

I really don't get the business model other than Asia is a huge market. So is Europe, but almost impossible to make a decent profit margin.

 

North America makes 90% of the profits and most years Europe, Asia, and South America lose money it seems. MONEY PITS.

[jpd80]

1 hour ago, bzcat said:

 

Locally assembled Lincoln had substantial price reduction from their previous imported versions. 

 

Local assembly also allowys Ford to modify the vehicles to better cater to local tastes and demands - Chinese consumers are a lot more demanding and picky about the interior material quality than US customers. 

Exactly, imported North American versions only go so far with supplying what Chinese buyers want,

Ford and Lincoln would be well advised to keep their models fresh lest they become show room wall flowers,

Ford's strategy of juicing a few more years out of stale models simply doesn't work in China, they need to keep up.

Edited January 18, 2021 by jpd80

[rmc523]

1 hour ago, jpd80 said:

Exactly, imported North American versions only go so far with supplying what Chinese buyers want,

Ford and Lincoln would be well advised to keep their models fresh lest they become show room wall flowers,

Ford's strategy of juicing a few more years out of stale models simply doesn't work in China, they need to keep up.

 

Frankly, it doesn't work here either, as we've seen them leave so many models to wither on the vine.  Maybe it doesn't need to be as often as China, but frequent/consistent updates are certainly needed.

[jpd80]

5 hours ago, rmc523 said:

 

Frankly, it doesn't work here either, as we've seen them leave so many models to wither on the vine.  Maybe it doesn't need to be as often as China, but frequent/consistent updates are certainly needed.

See, I think that had to do with not building in enough freshness at the start, Ford  is notorious for gliding in the final couple of years. Breaks my heart because the vehicles and customers deserve better.

[rmc523]

16 hours ago, jpd80 said:

See, I think that had to do with not building in enough freshness at the start, Ford  is notorious for gliding in the final couple of years. Breaks my heart because the vehicles and customers deserve better.

 

I don't know if I'd say that.  Fusion was easily best in class when it debuted for '13.