LANSING, Mich. (Michigan News Source) – Despite recent moves towards working with China locally to increase EV technology in Michigan, Ford Motor Company is reassessing its work with China abroad as profits plummet.
Having traditionally made some of its highest earnings with China, a report for the automaker and its joint ventures indicated that the sales in the first quarter have declined 25% year-over-year. Every brand part of General Motors (GM) and joint ventures suffered losses including 87% for Baojun, 35% for Buick, 32% for Cadillac, 34% for Chevrolet, and 13% for Wuling.
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According to some Ford Motor Company executives, the Blue Oval would move to a “leaner” model in China, focused on commercial vehicles and exports as reported in the Detroit Times.
Meanwhile, GM’s equity income in China slipped by $150 million year-over-year in the first quarter “due to lower volume and pricing pressure, partially offset by cost actions,” Chief Financial Officer Paul Jacobson said on the automaker’s April 25 earnings call.
“The environment in China has been very challenging as the industry navigates continued COVID-related impacts, regulatory changes for both EV and (internal combustion engine) vehicles and greater-than-expected competitive pricing actions,” Jacobson added. “The China team is taking aggressive actions to offset. However, we don’t expect an improvement in equity income until the second half of the year.”
Though GM has recently increased its Electric Vehicle (EV) development in the states, it has been slower to penetrate the market abroad, which according to some is becoming predominantly EV.
GM CEO Mary Barra in an interview with CNBC last week described the Chinese auto market as “incredibly difficult from an industry perspective and specifically for GM,” adding that the next year and a half “critical” for GM to introduce “the right EV products in the market to really win.”
Other competing car manufacturers such as Volkswagen are also working to increase their EV footprint in China as it attempts to keep up with domestic competition.
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Ford CEO Jim Farley and other company executives visited China as they learned about the EV market abroad and how it would affect their strategy for the future.
“We’re not going to try to serve everyone,” Farley said. “It’ll be a lower investment, leaner, much more focused business in China, and we’re going to have a team on the ground that will be global resources for the company, because of how important the market is in EV.”
Despite struggles abroad, Ford is seeking to expand its EV production capabilities through battery technology in Michigan.
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