Ford first-quarter China sales fell 21 percent

Ford Motor stated that its China car sales dropped by 21 percent in the very first quarter compared to a year earlier, after a tax cut on small-engined automobiles was rolled back.

Ford trailed a lot of its rivals in China in the first quarter with Toyota, Honda and others divulging sales increases and the automakers’ association reporting a 7 percent increase for overall sales.

Numerous in the market had feared that customers rushing to buy small-engine cars before a tax increase at the end of 2016 would result in weaker sales in the first few months of 2017.

Approximately 70-75 percent of Ford cars sold in China received the tax cut, which is meant for vehicles with engine capacity of 1.6 liters or below, Ford CEO Mark Fields informed reporters in Shanghai ahead of the release of Ford’s March figures.

“We have always prepared for the fact that (in) the very first quarter there would be payback from the pull forward of sales into the fourth quarter (prior to the incentive was decreased),” Fields informed, adding that sales would boost for the rest of the year.

Ford’s March sales dropped 21 percent year-on-year to 90,457.

The purchase tax for small-engined automobiles reached 7.5 percent this year from 5 percent in last year after the government took action to promote plunging sales. The tax will increase to the normal 10 percent rate next year.

Ford stated that its sales of vehicles that do not gain from the purchase tax incentive increased by double digits.