Back to top

Ford Posts Record 1H Sales in China

Read MoreHide Full Article

Ford Motor Co. (F - Free Report) has posted record sales of 549,256 vehicles in China in the first half of 2014. This translates into a 35% surge from 407,474 vehicles sold in the first half of 2013. The automaker’s passenger car joint venture – Changan Ford Automobile (CAF) – also witnessed a 39% increase in wholesale vehicle sales in the first half of 2014 to 397,958 units as against 286,433 units sold in the same period a year ago.

The year-over-year increase in sales was driven by strong demand for Ford Focus, Ford Kuga, Ford Mondeo and Ford EcoSport. Sales were also buoyed by favorable impacts from Ford’s strategic expansion in China capacity extension and recruitment of competent employees, thereby creating a line of high quality, safe, fuel efficient and high-tech products.  

Ford’s June sales in China increased 17% to 87,783 vehicles from 75,166 in the year-ago month. Meanwhile, CAF witnessed a 23% increase in wholesale vehicle sales in the month to 67,187 units, compared with 54,774 units in Jun 2013.

Ford Focus, which supported the improvement in CAF sales, recorded a 9% year-over-year increase in sales to 201,464 units in the first half of 2014. Also, Ford Focus sales in June improved 7% year over year to 33,614 units.

Apart from Focus, Ford Mondeo also witnessed significant demand in the country in the first half of this year. Mondeo passenger cars offer sophistication and advanced technologies, raking in sales of 59,726 units in the first half of 2014, manifesting an astounding rise of 124%. In addition, Mondeo sales rose a significant 168% to 10,044 vehicles in Jun 2014.

Ford also recorded better sales under its class-leading Ford Kuga and Ford EcoSport SUVs. In the first half of 2014, Ford Kuga sales went up 78% to 66,225 wholesales units while in the month of June, Kuga sales improved 18% to 10,901 vehicles. In the first half of 2014, Ford EcoSport sales rose 103% and June sales grew 28%.

The slew of positives continues with imported vehicle sales increasing 70% to 18,360 vehicles in the first half of 2014. Notably, Ford China primarily imports vehicles under the Ford Focus ST, the Ford Fiesta ST, the Ford Edge and the Ford Explorer brands.

Further, Ford's commercial outlet in China, Jiangling Motors Corporation (JMC), sold 132,938 vehicles in the first half of 2014. Sales surged 21% over 110,230 units in the same period year ago. Moreover, June sales augmented 19% to 19,012 vehicles.

Ford is implementing aggressive growth plans in China. Last month, the automaker opened a transmission plant in Chongqing for $350 million. This is the first transmission plant in the Asia-Pacific region of the company and will produce 400,000 units per year. Last month, Ford also launched 88 new dealerships across China which brings the total dealership count to 750.

Ford’s revenues in the first quarter of 2014 grew 0.8% to $35.9 billion on the back of market share gains in the Asia-Pacific region, particularly China. The automaker’s market share improved to 4.5% in the nation, fueled by strong sales of Kuga, Mondeo and EcoSport.

Ford currently carries a Zacks Rank #3 (Hold).

Some better-ranked automobile stocks worth considering are China Automotive Systems Inc. (CAAS - Free Report) , Wabash National Corp. (WNC - Free Report) and BorgWarner Inc. (BWA - Free Report) . China Automotive and Wabash National sport a Zacks Rank #1 (Strong Buy) while BorgWarner carries a Zacks Rank #2 (Buy).

More from Zacks Analyst Blog

You May Like