Ford: Car sales may shrink

A Ford model on display at an auto show in Qingdao, Shandong province, in May. [Photo/China Daily]

US motor giant warns it could be facing its slowest Chinese performance in 17 years

Automakers may sell fewer vehicles in China this year for the first time since at least 1998 as demand slows in the world's largest market, according to the low end of Ford Motor Co's revised projection.

Ford is estimating industry-wide sales to be between 23 million and 24 million units this year, Chief Financial Officer Bob Shanks said on Tuesday, compared with the 23.5 million sold last year. The low end of that forecast would represent the first decline in at least 17 years, according to official sales data. Before 1998, only production figures were available.

"It's clear we've seen a market slowdown there in the industry," said Mark Fields, Ford chief executive officer, according to a transcript of the call. "We're still very bullish on China, but it's going to go through its fluctuations and that's what happens in emerging markets. We're going to work our way through it in a positive way and grow the business."

Ford's forecast is the bleakest assessment to date by a major multinational carmaker of demand in China, where sales have slowed due to a combination of slowing economic growth, registration curbs and a volatile stock market.

The China Association of Automobile Manufacturers this month slashed its 2015 growth forecast to a 3 percent increase, the slowest expansion in four years.

"This may not be the last downward revision from automakers," said Steve Man, Hong Kong-based analyst with Bloomberg Intelligence. "If another city caps new car registrations, the weak sales may continue through 2016."

For carmakers including Ford, General Motors Co and Volkswagen AG, China is now growing slower than their respective home markets. Even Japanese automakers, which are doing better this year in China than their European and American counterparts, have warned of a "downward spiral" of excessive competition, capacity and discounting that will eventually affect them.

Ford previously estimated China industry sales this year to be 24.5 million to 26.5 million vehicles.