Ford Motor Company (NYSE:F) hires Chen Anning in an ambitious plan to stimulate sales in its China Division. The new changes include Spinning off its China operations from the Asia-Pacific Division. Ford’s China operations have been relatively slow and the company’s top management is making rigorous changes to stimulate performance. “Our performance in China clearly has been disappointing. I can assure you the leadership of the company has swarmed the issue.” Jim Hackett the company’s Chief executive acknowledged.
According to Hackett, the new changes are in line with the company’s strategy to position its international operations for long term success. The position of chief of operations for the company’s China division has been vacant for the past nine months following Jason Luo’s resignation in January.
Ford’s declining China sales
Anning’s first hurdle would be to contain the division’s nose-diving sales that have been ongoing for the better part of this year. According to statistics by the China Association of Automobile Manufacturers, Ford’s sales dropped four percent in July and 3.8% in the previous month. In the first nine months of 2018, sales compared to the previous year were down thirty percent.
The company further announced that its August sales declined thirty six percent compared to last year’s sales for the same month. Ford is blaming its devastating China sales to an “aging product line” and is planning a vigorous launch of 50 brand new designs by 2025.
According to plans, the company has unveiled a new model that the company is hopeful will sell in China’s small cities where the company currently has a poor presence. Ford will also be partnering with a local manufacturer to build electric automobiles.
The move to commission manufacturing in China will help the company be price competitive especially now that China imposes 25% tariffs on automobiles imported from the US. This is in retaliation to Trump’s 20% tariffs on foreign automobiles.
Hackett believes that penetrating the Chinese automobile market is crucial. “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.”