Ford’s sales in China dropped 43 percent in September from the same month a year earlier, a sign that sales are slowing in the world’s largest car market.
This is the third straight month of declining auto sales in China.
The second-largest U.S. automaker has been hit by the ongoing trade war between the U.S. and China, despite the fact that Ford sells cars in China through partnerships with local firms.
Ford shares are down nearly 30 percent since the beginning of the year. The stock hit a 52-week low of $8.57 in trading Friday.
Auto sales are down across the board in China, said Michael Dunne, president of ZoZo Go, an investment advisory firm that follows Chinese autonomous and electrified vehicle companies. This is the first sustained downturn Dunne has seen since the Asian financial crisis in the late 1990s, he said.
There are three major factors driving this decline in demand. The first is a crackdown on certain types of peer-to-peer lending practices in China, a feature of the Chinese financial system that has typically allowed less wealthy Chinese to borrow money at rates better than what banks are offering.
The second is a general cautiousness among Chinese consumers that has emerged recently.
“When times are good, the Chinese are really bullish and bold,” he said. “But when times are uncertain they become exceptionally conservative.”
There is a particular mentality that can take hold among Chinese consumers that is more pronounced than the lack of consumer confidence seen in the United States, for example. “And it is contagious,” he added.
Finally, there is the trade war with the U.S., which has exacerbated the uncertainty many Chinese feel from the overall economic slowdown.
Ford has unique problems in China, Dunne said. The automaker has not brought new products to market for more than a year, and Chinese consumers have sought cars elsewhere. Ford is expected to bring new products to China in the next few months, he said.
Ford was not immediately available for comment.