Ford's Electric Vehicle Push in China Amidst Sales Declines: A Report

This report examines the challenges Ford faces in the Chinese automotive market, primarily focusing on declining sales and the strategic shift towards electric vehicles (EVs). The analysis draws on three articles that highlight issues such as high import duties, increased competition from local brands, and the impact of pollution concerns. Ford's response involves a joint venture with Zotye to produce EVs, aiming to capitalize on government subsidies and the growing demand for environmentally friendly vehicles. The report explores the reasons behind Ford's sales decline, including the high cost of vehicles and the impact of trade tensions, while also noting the success of its Lincoln brand. It concludes with recommendations for Ford to navigate the complexities of the Chinese market and successfully implement its EV strategy, highlighting the importance of adapting to local preferences and leveraging government support.

Ford ramps up electric vehicle
push in China amid slowing
sales

EXECUTIVE SUMMARY
Ford is an automotive industry organisation which face several problems in China while
started supplying their cars. These issues result in decreasing sales of Ford cars because of
expensive and every type of people can't afford it. So for overcoming with such circumstances
Ford join venture with Zoyte and these both start producing electric car as well capture entire
market of Beijing.
Major reasons of decreasing sales is car become expensive because of import duty which
is high. Apart from this, these motor vehicles are major reason of pollution in China because of
this also people stop using these cars and move towards the electronic vehicles. Moreover, for
this government also take major steps by providing subsidies to the owners and users. Along
with this battery life of these EV is no much so for such problem legal bodies provide
infrastructure facilities which will charge the vehicles.

Table of Contents
INTRODUCTION...........................................................................................................................4
TASK 1............................................................................................................................................4
Article 1..................................................................................................................................4
Article 2..................................................................................................................................7
Article 3..................................................................................................................................9
TASK 2..........................................................................................................................................10
TASK 3..........................................................................................................................................11
Recommendation...........................................................................................................................12
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Changes are consider as continuous process as whole world wanted to experience
something new and distinct from others. As a result, almost every industry are getting engaged in
introducing innovative products for maintaining their position at marketplace. From which,
automotive industry are also involved in bringing various innovative as well creative products
for satisfying needs and wants of customers (Wimmer, 2012). Ford which is an automotive
industry company founded in 1903 on 16th June by Henry Ford. Mainly they are getting engaged
in manufacturing unique cars and serve at global marketplace. Therefore, assignment is going to
highlight the major problem which is encountered by Ford while running their business in China.
Basically, entire project is based on three major articles which throw some lights on sales
minimization of the firm in China due to various reasons. Additionally, solution of this sparking
issue that is faced by Ford is also outlined in this project such as; launching electric car with
unique quality and feature.
TASK 1
Article 1
“Can China's electric car market keep growing if Beijing pulls the plug on subsidies?” -
Ford is the automotive industry company whose sales get decrease in China because of high
price or expensive products. Thus, to overcome with this situation they introduce Electronic
vehicle in the market of China which is ozone-friendly (Kasperk, 2012). As per the current data
it has been identified that China's biggest property developer named as Evergrande Group paid
amount US $ 854 million for 45 % Share in fledging electric Vehicle (EV) maker which is co-
founded by the former internet star and now blacklisted debtor Jia Yueting. Moreover, there are
mainly four problem which is introduced by traditional cars and solved by the electronic vehicle
such as road accident, traffic congestion, pollution and user experience.

Illustration 1: China’s electric car market keep growing if Beijing pulls the plug on subsidies
(Source : China’s electric car market keep growing if Beijing pulls the plug on subsidies 2018)
Above mention graph represent that if car are produced in electrified globally and
electricity generated in clean manner, by this carbon emission will be decrease by the 16 million
tonnes per day. Whereas, NIO is one of the start-up of various dozen electric car which includes
Future mobility and Byton to have appear in China in current years due to the wholehearted
support from respective nation government (Chang, 2011). For gaining growth in the electronic
vehicle market area, Beijing which is capital of Red China provide research and development
grants to the Car makers as well subsidies to thFord, China's Zotye Auto plan JV to build electric
vehiclese customers.
China is the leading country in the Electronic Vehicle compare to United States and
Europe. From the below mention graph it is easily understood although, subsidies given by the
government of China made the price of electric car reasonable. As well cost of electricity is less
compare to the gas cars this is the main reason of building market for EV. Moreover, Ford is the

company which distributes free car plate license to the persons who are purchasing new
electronic vehicle which is formed by the domestic car makers.
(Source: China Leading, 2018 )
According to Tsinghua University Zhang it has been estimated that approximately 95 per
cent of the China's electric vehicle owner purchase not with the motive of environment
awareness but due to the pragmatic reason like EV are easy to access in big cities. Whereas, on
the other hand rest of the 5 % include Yu Xinwei which is budgeting 3,00,000 yuan for
purchasing his first car.
Below mention graph is explaining that start ups of NEV (new energy vegicles) easily
capture China's market compare to United State because in 2015 sales unit of China is 331,100
whereas of US is 116000 (Ogrosky, 2016). In 2016 507000 of China and 199000 of US as well
in 2018 it has been estimated that it will be 1,000,000 of China and 4,00,000 of US. Hence, sales
unit of China is high rather than United State.
Illustration 2: China Leading

(Source: New Energy vehicles sales 2018)
Problem – After going through this article it has been analysed that there is several reasons
because of that sales volume of Ford car is decrease. As a result ford introduce Electronic vehicle
to overcome with the situation. Main reason of decreasing sale is that Shanghai is offering high
rate or luxury cars which is not affordable for everyone. As well these have gas cylinders also
which is expensive compare to the electric vehicles (Shin, 2018). Apart from this, these cars are
giving negative impact on the environment as well on life of human beings such as road
accident, traffic congestion, pollution and user experience. From this article it has been analysed
that major reason of decreasing sale is their expensive products which is not affordable by
everyone.
Article 2
“Ford slides deeper into China rut after ‘worst ever’ first-half vehicle sales” – Ford
introduce innovative product in market which is name as electronic vehicle as per the current
data it has been analysed that sale of Ford car decrease by 26 per cent in the first six month of
2018 in comparison to the last year of same period. Auto market-area of China grew 5.6 per cent
overall in the first half. With this sales of vehicle reach approximately 14.1 million and there is
no relief while trading in China (China rut after ‘worst ever’ first-half vehicle sales 2018). Thus,
volume of sales in continuously reducing in China this is the main reason of Bringing Electronic
Vehicle in market.
Illustration 3: New Energy vehicles sales

As per the views of Alan Kang who is the senior market analyst of LMC automotive state
that there is an reason because of the Ford is facing bad situations in China is fiercer competition
in the market of cars, in which luxury brands are troubling amid the growth of local Chinese
brands. Competition level is high in automotive industry because of several number of
organisation which is offering low rate cars compare to Fords and these are in approach of evey
type of people (Edmonston, 2013). Whereas, not only Ford are suffering but several other
companies are also suffered a lot such as KIA, Hyundai and Peugeot SA this statement is also
given by Mr. Kang. China is preferring their local brand because these are not much expensive
compare to Ford and their own country brands are affordable by every kind of people. Apart
from this, there is some other reasons also of diminishing sales i.e. United state and china both
are doing tit for tat practices with each other related to duties on import which worth $ 34 billion,
with Beijing accusing Washington (capital of US ) of causing the “largest-scale trade war” ever.
Because of such trade war between both the countries result in increasing prices of car and these
become expensive such activities are giving their negative impact and sales get decrease.
With automotive subject to additional duties by Beijing which is capital of China, Ford
has more to suffer. According to the given data Last year, it shipped approximately 80,000
vehicles to China from North America, more than half of them its upper-end Lincolns including
the Lincoln MKX crossover SUV and Lincoln Continental sedan. High amount of import take
place due day before of this it is said by ford that they will not going to increase price of Lincoln
model in China. This engrossing the additional tariffs cost on vehicles made in United States.
Thus, In June ford's premium Lincoln brand sales rise by 12% to 4,350 vehicles, totalling of the
first six months sales volume is 24, 314 vehicles, which rose 4 per cent in Beijing compare to last
year.
Problem find in the article– From this article it has been analysed that because of trade
war between Beijing and Washington price of ford car is increasing. High duties are charging on
import $34 million due to products are becoming more expensive and not affordable by everyone
(bordoff, halff and Losz, 2018). Apart from this, there is some more issues because of that Ford
is suffering i.e., fiercer competition. Automotive is the industry there are several other enterprise
also which is offering car at low price compare to the respective organisation due to this also
sales volume is decreasing. Ford is the firm which is offering high rate products that is not in
approach of ever person it is the main reason of effecting sales.

Moreover, there is one more issues which is come out that after going through this article
is Lincoln sales is not affected in China because of no duties on this car. Thus, its price will be
not that much high and in affordance of everyone.
Article 3
By Daniel Ren
“Ford’s electric car venture with Zotye to speed up US manufacturer’s expansion in
China” – Ford introduce their electronic vehicles in China by by signing an joint venture
agreement with Anhui Zotye auto-mobile. Value of the agreement is 5 billion Yuan in the
currency of Beijing and US $754 Million their main focus is on electric cars. In a significant step
in the direction of tapping the mainland’s new energy vehicle section (Ford’s electric car venture
with Zotye to speed up US manufacturer’s expansion in China 2018). For manufacturing Electric
Vehicle new factory was established in Zhejiang province for the motive of production new cars.
Named of the 50 – 50 venture is Zotye Ford auto-mobile as well in China there is alarming
pollution level in their major cities. This is the main reason because of that Beijing pushing
towards the plug in vehicles and investing 10 billion for the purpose of research and
development, subsidiaries as well several other auto-maker also for launching their products.
Ford is doing electronic vehicles business in Chain because it is the fast growing country
for NEV as well it is expected that it will grow up to 6 million per year till 2025 out of which 4
million is electric. As per the statement of Daniel Ren 2017, Ford is already having partnership
with two auto-mobile company of China which is named as Chongqing Changan Automobile
and Jiandling Motor as well after the joint venture of Zotye and Ford it will become third major
partner of US car-maker on the mainland after these two.
As per the views of Peter fleet, the president of Ford company in Asia-Pacific “Zotye
Ford Automotive will bring latest brand products of small electric vehicles. Because they are
exploring creative vehicles mobility as well connectivity services mainly for upcoming or
young generation people”. China is the largest EV market as per the data of 2016 it has been
analysed that Beijing had 336000 registration of new electric vehicles (Fattouh, 2014). Present
policies of China playing important role in deploying and developing EV because government of
respective organisation is supporting for this innovation and creation.
A limited battery capacity and similar travelling range remains an hindrance for
Electronic Vehicles, thus there is requirement of emergency additional charging stations and

supporting infrastructure in the EV. In 2017 Their are 213,903 vehicle charging stations for
urgency so that federal employees as well authorized users can charge.
Problem find in the article – After going through this article is has been analysed that
pollution is the major issue because of that China wants to introduce electronic vehicles in their
country (Boehmer-Christiansen, 2016). Everyone want clean and pollutant free surrounding to
live because health matters a lot. As well as student and young person can afford high gas and
petrol because they are at the level of student. Apart from this NEV don't have much capacity of
battery so that the users can travel whole day from morning to evening. Moreover, at the time of
joint venture several difficulties will be faced by the Ford and Zotye because every country have
their different laws and legislation, rules and regulation because of this these two companies face
several difficulties.
TASK 2
Solution of First issue – To overcome with such issues of decreasing sales ford
introduce an new product named as electronic vehicle in their market of China so that they can
maintain their sales and maximise profit. This EV sale is high in the China compare to the other
countries such as Europe and United State. It is necessary for Respective organisation to bring
something new in market because it the the existing product results in decreasing brand image in
the market of China and no one is purchasing their cars due to high rates.
After the innovation of new energetic vehicle in the market of China perception of people
related to the brand get change. Ford is able to promote their Electronic cares because of
subsidies which is provided by the government (MacNeil, 2016). If there is any issue in car
related to manufacturing then their engineer will be responsible for this. Whereas, on the other
hand if their any other issues which is not related to the production in that situation driver have to
go at service centre.
Solution that helps to reduce negative impacts of second issue – Their are mainly two
solution for the sales issue of Ford Automotive Company that United State and China not have to
do tit for tat with each other but they can do business with mutual understanding and should not
have to charge high duties on import. Thus, cost of car will not rise too much because of duties
and it will be in reach of everyone. Such practices can be done done with understanding of both
the countries and it will result in benefits to automotive industry as well Ford company.
Whereas, there is an another solution also for this issue Ford can also do joint venture with some

other automotive enterprise of Beijing. So they can supply their products with no restriction all
over the world and can generate high amount of profit. For instance, Jaguar land rover which is
an Britain luxury car company sealed a joint venture with automotive organisation of China
which is named as Chery Auto-mobile (Wishart, 2015). Their investment is worlds second
largest in the economy is of £1.1bn. In simple term it can be said that, if United State and Chain
both work together with duties on import then it will be beneficial for both, economy of these
two nation will rise.
Solution to reduce negative impact third issue – Every problem have some solution
same above mention also have, for resolving pollution issue Zotye Ford Auto-mobile is
introducing electronic vehicles which is not expensive as well ozone-friendly also (Kalen, 2012).
It is responsibility of every citizen who is living in the country that their environment should be
safe, clean and pollution free. Another issue is that electronic vehicles don't have much battery
capacity that an user can travel from morning to the evening. For solving this issue government
provide emergency charging facility to the federal employees as well their users also.
Issues related to the laws and legislation during joint venture can be solved by bringing
flexibility of working. So that, both the organisation can modify their rules and regulation they
are following as per the requirement (Yaro, 2016). Although, joint venture is the contract or
arrangement in which two or more than that company pool their funds and resources for
achieving particular goals as well objectives. The task can be new or any other which is not
related to existing process as well in 50 – 50 venture both the organisation are equally
responsible for profit and loss along with the cost which is associated with it. Generally, venture
have their own identity which is distinct from their partners.
TASK 3
Electric vehicles battery capacity is mention below :-
Battery Range km (mi) Wh/Km (Mi) Energy Cost/km (Mi)
23kWh 110km (75) 200 (320) $0.04 ($0.066)
From above mention information of battery capacity it is analysed that their can be
requirement of charging in the mid of the day no one can use electric vehicles whole day from
morning to the evening. This is the main reason government provide electric charging
infrastructure facility to the users. Moreover, their can be issues in care which may be of

manufacturing in that case customer have to deal with respective company. Whereas, on the
other hand, if the problem is related to its working or any accident in that situation there is need
of service centre and mechanic.
Recommendation
Throughout the assessment it has been understood that company needs to implement
certain changes at workplace by considering necessary facts or figures in order to control
probabilities of mistakes and errors. However, Ford is having positive image at marketplace
because its qualitative products and services. Thus, in order to overcome few major issues
company needs to come up with creativity and changes which is accepting by each or every
individual. Some of the major thing which needs to follow by company is discussed below-
 requisite to launch a creative product or service.
 Adopt unique or advanced marketing strategy for impressing customer of china.
 Analyse the competitor strategy.
 Hired skilled and talented employees so that they can accomplish difficult business
operations and handled complex technology.
CONCLUSION
From the above mentioned assignment it has been concluded that Ford is loosing their
sales in China because of their high cost products as well they are giving negative impact on
environment also. Thus, in order to overcome with this situation ford was involved in
introducing electronic vehicle in the market of China. Electricity is less expensive as compare to
gas because of the ozone-friendly nature. As a result, it has been analysed that EV easily capture
the whole market. In China, start ups are easily attract customers as well slow sale of Ford get
increased after introducing Electronic vehicle in the market. After going through this report, it
has been identified that main motive of ford behind introducing new energetic vehicle is to
change perception of people related to the ford brand. Moreover, through join venture of Ford
and Zotye electric car market of the China is increasing which results in less expensive vehicles
and pollution free environment for the people.

REFERENCES
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and the Unexpected Emergence of China's Independent Auto Industry (Doctoral
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Ogrosky, C., 2016. A Tale of One China: How and Why Has the Efficacy of United States Arms
Sales to Taiwan Changed Since 1990. AIR UNIV MAXWELL AFB AL MAXWELL
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Shin, S., 2018. Ancillary Services Participation for Electric Vehicle Fleets.
MacNeil, R., 2016. Between innovation and industrial policy: how Washington succeeds and
fails at renewable energy. Prometheus, 34(3-4), pp.173-189.
Edmonston, P., 2013. Lemon-Aid New and Used Cars and Trucks 1990–2015. Dundurn.
bordoff, J., halff, A. and Losz, A., 2018. New Realities, New Risks: Rethinking the Strategic
Petroleum Reserve.
Wishart, K., 2015. Owning the new economy: A guide to intellectual property management for
Australia's clean technology sector.
Fattouh, B., 2014. The US Tight Oil Revolution and Its Impact on the Gulf Cooperation
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Kalen, S., 2012. Thirst for Oil and the Keystone XL Pipeline. Creighton L. Rev., 46, p.1.
Yaro, J.A., 2016. Squaring Growth with Green Transition in Africa’s Automobile Sector.
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Online

China’s electric car market keep growing if Beijing pulls the plug on subsidies 2018. [Online].
Available through<https://www.scmp.com/business/companies/article/2153041/can-
chinas-electric-car-market-keep-growing-if-beijing-pulls-plug>
China Leading 2018. [Online]. Available
through<https://www.scmp.com/business/companies/article/2153041/can-chinas-
electric-car-market-keep-growing-if-beijing-pulls-plug>
New Energy vehicles sales 2018. [Online]. Available
through<https://www.scmp.com/business/companies/article/2153041/can-chinas-
electric-car-market-keep-growing-if-beijing-pulls-plug>
Ford slides deeper into China rut after ‘worst ever’ first-half vehicle sales Ford slides deeper into
China rut after ‘worst ever’ first-half vehicle sales 2018.[Online]. Available Through
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worst-ever-first-half-vehicle-sales/article24360554.ece>
Ford’s electric car venture with Zotye to speed up US manufacturer’s expansion in China 2018.
[Online]. Available
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electric-car-venture-zotye-speed-us-manufacturers>