Published: Sun, July 08, 2018
Finance | By Claude Patterson

Ford says no plans to hike China prices despite new tariffs

Ford says no plans to hike China prices despite new tariffs

All Lincoln vehicles that Ford sells in China are imported from North America.

Ford Motor's (F.N) China slump intensified, with vehicle sales tumbling 38 percent in June and the automaker recording its worst-ever first half, as buyers shunned its aging models that are awaiting overhauls and flocked to rivals.

China, which just days ago cut tariffs on all imported automobiles, plans to slap an additional 25 percent levy on 545 American products, including USA -made cars, should Trump's administration proceed with plans to implement tariffs on $34 billion of Chinese imports beginning on Friday.

China rejected "threats and blackmail" ahead of planned US tariff hike, striking a defiant stance Thursday in a dispute companies worry could flare into a full-blown trade war and chill the global economy.

Ford added it encouraged Washington and Beijing to resolve their issues over trade and that it would "continue to monitor the situation as it evolves".

All Lincoln vehicles that Ford sells in China are imported from North America.

That took sales for the first half of the year to 400,443 vehicles, down 25 percent from the same period a year ago. The brand past year sold 54,124 vehicles in China, up 66 percent in 2016.

Ford and Lincoln both cut prices on imported models in May after China announced steep tariff cuts for automobiles and auto parts that came into effect starting July 1. Lincoln, the luxury unit of Ford, said that it has no plans at this time to increase prices.

Other firms that export US -made cars to China include BMW (BMWG.DE), Daimler AG's (DAIGn.DE) Mercedes and Tesla (TSLA.O).

Ford's troubles in China, which include the absence of a country head following the abrupt departure of the previous chief in January after only five months at the helm, contrast with General Motors Co's (GM.N) steady performance there.

Amy Marentic, president of Lincoln Asia Pacific, said that the company's performance in the first half reflects the continued inroads made by its service and vehicle models in the China market.

"An increase in input costs might have a temporary impact on margin but, if the impact were large enough to cause a downturn in auto demand, given the industry's capital intensity, the impact could be much more devastating", Whiston says. This article is strictly for informational purposes only.

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