Ford, Hyundai, others reduce output in China since price reduction failed to eliminate dull sales

Gasgoo.com (Shanghai July 21) - To save themselves in the rarely-witnessed downturn in Chinese market, automakers like Beijing Hyundai, Changan Ford and BMW have done all they could, including reducing official vehicle selling prices and lowering sale target to support dealers. But these actions haven’t taken any obvious effect yet. Thus, many manufactures have to resort to output reduction.

It is reported that Beijing Hyundai may reduce its production by more than 10 percent, which hasn’t been confirmed by the company. Luxury vehicles manufacture BMW has announced its output alternation plan in China. Luo Kongxiang, the president and CEO for China of Ford also told reporters that the company will adopt the measure of cutting capacity.

Normally, automakers will not alter their production unless there is a wide gap between the reality and what they have expected. The reality is that he annual sales growth of Chinese vehicle market has collapsed from ten years earlier of more than 30% to foreseeable 3% of the year.

Since April, a rarely-seen situation has maintained till present that almost all the mainstream automakers in China lowered much of their selling price in China to eliminate dull sales. In April fifth, Shanghai VW announced official price reduction for many of its models and a series of promotion discounts. Then, Changan Ford and Beijing Hyundai also reduce selling price through respectively remove purchase tax and interest-free loans. Shanghai GM lowered the selling price of more than 40 of its models.

However, passenger vehicles sales and productions dropped in a row in June for the first time since 2008 the global economic crisis. The sales growth rate for Chinese passenger vehicles in the first half of the year has declined 6.38 percentage points from a year earlier to 4.8 percent. All the five best-sellers in China in the first half of the year, including Shanghai VW, FAW VW, SAIC GM and Beijing Hyundai, reported sales slide in the same period.