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Ford's (F) Sales Take a Hit in China, Decline 30.3% in Q3

Zacks Equity Research

Ford Motor Company’s F sales in China fell 30.3% in the third quarter from the same period last year. It delivered 131,060 vehicles in China in the third quarter of 2019.

In the third quarter, the sale of Ford brand totaled 77,443 vehicles, Lincoln brand totaled 11,618 units and that of the JMC indigenous brand totaled 41,999 units, registering declines of 37.7%, 24.1% and 13.3%, respectively, from the same period last year.

The decline in sales was primarily due to China V Emission Standard stock clearance actions. A weak auto market and trade-war politics continued to worsen Ford’s ongoing slump in China.

Further, the U.S.-Sino trade tiff is anticipated to weigh heavily on the company. Moreover, increased costs of raw materials and rising tariffs may put pressure on the firm’s profitability. Notably, over the past year, its shares have underperformed the industry it belongs to. Over this period, shares of the company have declined 0.3% against the industry’s growth of 4.1%.

Looking ahead, Ford China remains focused on business transformation, following the launch of the “Ford China 2.0” strategy. Per the strategy, the carmaker plans to launch more than 30 models in China by the end of 2021. More than a third of these models are anticipated to be electric vehicles.

Moreover, Ford launched a series of new models in the third quarter such as Focus, Edge and the electric territory that caters to the needs and requirements of customers in China. Further, Ford and Chongqing Changan Automobile Company plan to strengthen their cooperation and strive to innovate business models.

Zacks Rank & Stocks to Consider

Ford currently carries a Zacks Rank #4 (Sell).

A few better-ranked stocks in the Auto-Tires-Trucks sector are BRP Inc DOOO, currently sporting a Zacks Rank #1 (Strong Buy), and Lithia Motors LAD and Standard Motor Products, Inc (SMP), carrying a Zacks Rank of 2 BUY. You can see the complete list of today’s Zacks #1 Rank stocks here.

BRP has an expected earnings growth rate of 17.2% for 2019. The company’s shares have gained 52.9% year to date.

Lithia Motors has an expected earnings growth rate of 12.9% for 2019. The company’s shares have gained 65.5% year to date.

Standard Motor has an estimated earnings growth rate of 21.9% for 2019. Its shares have gained 17.3% year to date.

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