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A joint venture car company is said to have greatly reduced its production capacity due to poor sales.

2024-02-24 Update From: AutoBeta autobeta NAV: AutoBeta > News >


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Following the news of layoffs in Ford China a few days ago, its joint venture, Anford, was also reported to have reduced millions of production capacity.

Recently, Changan Ford, a joint venture owned by Ford in China, cut millions of production capacity due to falling sales, according to the Changjiang Business Daily. It is understood that Changan Ford has five vehicle factories in Chongqing, Harbin and Hangzhou, with a total production capacity of 1.6 million vehicles, and its current production capacity has been reduced to 670000 vehicles. Based on the 2022 production released by Changan Ford, it is not difficult to calculate that the output in 2022 is 314300 vehicles, and its capacity utilization rate is about 47%, or more than half of its capacity is idle.


Relevant data show that Changan Ford was established on April 25, 2001, jointly funded by Changan Automobile and Ford Motor, headquartered in Liangjiang New District, Chongqing. After its establishment, Changan Automobile successively launched models such as Wing Tiger, Fox, Yibo, Mondeo, Carnival, Taurus, Forrest and Ruijie. Changan Ford's sales rose sharply in 2011, with annual sales of 321000 vehicles. Sales grew rapidly in the years that followed, with sales peaking at 957000 in 2016.


However, the image of Changan Ford brand was greatly affected by the incident of broken shaft and engine cylinder head cracking of Ford Yihu model. Although Changan Ford recalled 82976 wing tiger cars caused by engine cylinder head cracking caused by oil leakage due to partial overheating of engine cylinder head in 2017, it still failed to maintain its peak sales. Changan Ford's annual sales fell to 828000 in 2017, halved to 378000 in 2018 and 184000 in 2019, a drop of 773000 compared with its peak. From 2017 to 2019, sales fell 12.27%, 54.37% and 51.3% respectively from a year earlier.


After the decline in sales, Changan Ford also carried out personnel adjustment and product line adjustment. In 2017, it signed the "deepening Strategic Partnership Framework Agreement" with Changan Automobile and issued the "Ford China 2.0 Strategy", which proposed to "be more Ford." more China "a more localized way to improve performance in the Chinese market, and said that it plans to release 30 new cars in the next three years, and strive for sales to break through the million mark in 2019. However, those who broke the Wanbai barrier never got what they wanted. In September 2019, Changan Ford implemented the "acceleration Plan", that is, from 2019 to the end of 2021, Changan Ford will launch at least 18 new products to further improve the product matrix. Under the "acceleration plan", thanks to the output of Ruiji, Ruijie, explorers and other models, Changan Ford's sales rebounded in 2020, with annual sales of 253300 vehicles up 37.69 percent year-on-year and 304700 vehicles in 2021, up 20.29 percent from the same period last year.


The good times didn't last long. Changan Ford's sales fell again to 251000 vehicles in 2022, down 17.61% from a year earlier. With poor sales and declining market share, Changan Ford changed from profit to loss in 2022, with a net profit of-2.449 billion yuan. In response to the performance loss, Changan Ford said: profits fell sharply as a result of the closure of backward production lines in 2022 and the impairment of Ford-related factories, while Fox stopped production to accelerate depreciation on the production line.


It is not difficult to see that the sharp reduction in Changan Ford's production capacity has something to do with the poor sales of Changan Ford in recent years. From the point of view of all the models on sale under the Changan Ford brand, the current sales sources of Changan Ford mainly come from SUV models and car models. Among them, the SUV models sold under the Changan Ford brand include Ford Explorer, FORD EVOS, Ford Ruiji ESCAPE, brand new Ford Leader S, Ford Leader extreme Edition, Ford Leader Yu and 2020 Ford roadshakers, covering compact SUV, medium-sized SUV and medium-to-large SUV. The car model has the brand-new focus, Mondeo, two models.


For the future development of Changan Ford, Changan Ford said that it will continue to focus on "electrification and intelligence", launch products and services around "consumer-centered", and upgrade the consumer experience. In accordance with the principle of joint development of Ford and Lincoln brands and multi-product line layout, it is planned to continue to launch 16 models in 2023-2025 to further enrich the product matrix, maintain market freshness and increase sales. However, from the current market environment, although Changan Ford is constantly making adjustments, it is facing more and more market competition, on the one hand, the price of joint venture brands is falling, on the other hand, the upward burst of independent brands. It remains to be seen whether Changan Ford can return to its peak.

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