Ford Witnessed Sales Decline In China

The sales of Ford and General Motors have decreased by 9% in China after both gained in the end of last year.

Ford and General Motors have both recorded steep decreases in sales in China in February on a yearly basis as a part of an extensive slowdown attributed to a certain extent to a drop-off around the Lunar New Year Holiday. Sales of both automakers have decreased by 9% in February, the companies stated after a series of gains on a monthly basis led by newly offered government subsidies launched in 2015 for stipulating the demand for fuel-efficient vehicles.

The automotive market of China has recovered from a slowdown in summer last year because of the incentives that are applicable to 70% of the vehicles delivered in the country. A possible red flag is raised by recent decreases in sales, which signals that the biggest car market of the world could cool permanently amidst the sluggish economic growth of the country.

During the first two months of this year, Ford and Michigan sales increased by 18% and 11%, respectively. Analysts typically looked at January and February sales together which contributed to a disruption triggered by the New Year Holiday.

The China Automobile manufacturers association will report the official new-automobile sales of February in March 2016 for each vehicle manufacturer in the country. Other manufacturers also recorded decreases in past months, including Mazda Motor Corporation and Hyundai Motor Corporation. The Chinese biggest domestic manufacturer ‘SAIC’ suffered from 7% decline in sales, adversely affected by decreases reported by joint-project partners Volkswagen AG and GM, both lead the market in the state.

The vehicle sales in China boosted to the highest level in the last year, growing by 7.3% from 2014 to a figure of 24.6 million, but the sales grew at a rate, which was slower as compared to the two digit increases posted in 2014 and 2013.

The association of China automakers estimates that the sales of passenger-vehicles in the next year will grow by 7.8% to a figure of 22.76 million. Companies have hurried to establish plants and increase production in the country, while expecting to tap increasing demand for new cars by rapid urbanization and growing middle class in what’s considered amongst the most lucrative markets of the automotive industry outside the United States.

Particularly, January proved to be a strong month for companies in China, with sales growing by 9.3% from the previous year, as purchasers snapped new cars prior to the holiday. Travelling is heavy around the New Year holiday.