Ford’s China JV ends some contracts with job agencies as sales declines

Ford logo in their auto plant

Ford Motor’s joint venture with China Changan Automobile Group has taken decision not to renew its contract with some agencies providing it with workers, as automakers are having hard time to cope with declining sales in China.

The New York Times reported previously that the Ford-Changan joint venture has “quietly begun” removing thousands of its 20,000 workers in the world’s largest car market.

Ford did not discuss that how many of its employees were being supplied by the agencies.

China’s car sales dropped 2.8 percent in last year, according to China’s Association of Automobile Manufacturers (CAAM), marking the first contraction since the 1990s. Reducing economic growth together with the fallout of trade frictions with the United States have damaged demand.

Ford suffered an even deeper sales decrease of 36.9 percent last year in China, because of the lack of new and remarkably redesigned models, especially SUVs for the market.

Company executive informed Reuters in 2018 it was unlikely that Ford’s sales will achieve the momentum in China until later in 2019 when the first new vehicle models shows up in showrooms in large enough numbers.

Beijing has in recent months vowed various measures to increase private consumption to prop up growth, consisting subsidies to increase rural sales of some vehicles and purchases of new energy vehicles. January’s car sales dropped 15.8 percent from a year previously, however, and CAAM does not expect annual sales boost in this year.

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