Ford slides deeper into rut after worst ever first half vehicle sales

Ford Motor’s China slump intensified, with vehicle sales tumbling 38 percent in June and the automaker recording its worst-ever first half, as buyers shunned its aging models, which are awaiting overhauls, and flocked to rivals.

The US automaker sold 62,057 vehicles in China in June, taking its sales for the first half of the year to 400,443, down 25 percent compared with the year-ago period. According to consultancy LMC Automotive, it was Ford’s biggest first-half percentage decline since starting opera- tions in China in 2001.

Ford, which undertook a big expansion in China earlier this decade, is paying the price for a lack of new models in its lineup. Last year, its sales fell 6 percent even as overall vehicle sales in China rose 3 percent.

“We always knew it would be a challenging year for us given our position in the product cycle,” Peter Fleet, head of Ford’s Asia-Pacific operations, which include China, said in a statement.

Fleet has previously said Ford’s sales will not likely regain momentum in China, the world’s biggest auto market, until next year when the first new vehicle models arrive in showrooms in large enough numbers.

LMC Automotive senior market analyst Alan Kang said one reason Ford is struggling in China is “fiercer competition” in the car market in the country, where luxury brands are suffering amid the rise of domestic brands.

“Weak global brands are squeezed like the meat in a sandwich, so this is why we can see not only Ford,” but Hyundai Motor Co, KIA Mo- tors Corp, and Peugeot SA have “all suffered” in the last two years, Kang said.

The dim sales numbers come as the US and China slapped tit-for-tat duties on $34 billion worth of the other’s imports on July 6.

With automobiles subject to additional duties by China, Ford has much to lose. Last year, it shipped about 80,000 vehicles to China from North America, more than half of them its upper-end Lincolns.

In an effort to reverse the slump, Ford has said it is overhauling its product lineup for China. Redesigned Focus compact and Escort subcompact cars are due to hit showrooms in China later this year, along with the new Lincoln MKC and Nautilus sport utility vehicles.

In June, sales of Ford’s premium Lincoln brand rose 12 percent to 4,350 vehicles, with sales volume for the first half totaling 24,314 vehicles, up 4 percent from a year earlier.