💎 Fed’s first rate cut since 2020 set to trigger market. Find undervalued gems with Fair ValueSee Undervalued Stocks

Ford's China sales bounce back in June as tax impact fades

Published 07/06/2017, 02:57 AM
© Reuters. FILE PHOTO: Ford Taurus cars are seen during a presentation at the 16th Shanghai International Automobile Industry Exhibition in Shanghai
F
-

By Jake Spring and Norihiko Shirouzu

BEIJING (Reuters) - Ford Motor (NYSE:F) Co said its China sales surged 15 percent in June, their strongest pace of the year, and it was optimistic about the outlook for the second half as the industry puts the phasing out of a tax cut behind it.

Peter Fleet, Ford's Asia-Pacific chief, said the first quarter had been difficult after a purchase tax on small-engine cars rose to 7.5 percent from 5 percent previously.

Although Ford's China sales declined 7 percent in the first-half from the same period a year ago, they were up 7 percent in the second quarter.

Sales for June alone climbed to more than 100,000 vehicles with deliveries of sedans including the Escort and Mondeo, which were hurt by the tax increase, improving.

"I would expect to see for the third quarter strong single digit percentage growth (for) the industry. That's certainly how it looks to us based on the run rate and how the month of July has opened up," Fleet said in an interview.

Ford's level of discounting tracked an overall 4 percent price decline for the industry so far this year.

"I'm not interested in driving our prices down to drive market share," Fleet said.

Year-on-year comparisons will "get a bit tricky" in the fourth quarter because sales rose so fast at the end of 2016 as consumers rushed to buy cars before the purchase tax went up, he added.

The purchase tax on small-engine cars is set for another increase back to its normal 10 percent rate in 2018.

Ford aims to focus its efforts on the sport-utility vehicle market, the fastest growing segment in China, with plans to launch a new version of the EcoSport small SUV later this year.

© Reuters. FILE PHOTO: Ford Taurus cars are seen during a presentation at the 16th Shanghai International Automobile Industry Exhibition in Shanghai

Outside of China, Ford continues to post positive sales growth in Southeast Asia, India and Australia, he said.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.