October 24, 2018 / 12:16 AM / 2 months ago

Ford hires new China chief to tackle daunting turnaround task

BEIJING/SHANGHAI (Reuters) - Ford Motor Co (F.N) has hired a new chief for its troubled China operations, ending a nine-month search after the previous head suddenly quit and tasking him with fixing a deep sales slump in the world’s biggest car market.

FILE PHOTO: Chery Automobile Co Ltd CEO Chen Anning attends an interview with Reuters in Shanghai, China August 23, 2017. REUTERS/Aly Song/File Photo

Anning Chen, 57, a former Ford engineer and chairman of Chery Jaguar Land Rover in China, will take the helm from Nov. 1. An American national who was born in China, he is fluent in Chinese and has roughly 14 years experience of working in the country.

The move, which cements a shift to Chinese management in the country for Ford, comes at a pivotal time with sales sliding on the lack of a popular SUV for the market as well as rocky relationships with its Chinese joint venture partners.

“Getting a local person in this role is a good move. This will likely give Ford a better understanding of the market,” said Bill Russo, head of Shanghai consultancy Automobility Ltd.

Ford’s vehicle sales fell 43 percent in September from a year earlier and are down 30 percent in the first nine months of the year. Ford blames its weak China business on an aging model lineup that is awaiting an overhaul.

By comparison, industry-wide sales are up 1.5 percent for the year to date with rival Toyota Motor Corp (7203.T) logging a 12.5 percent gain.

China represents Ford’s second-biggest market by sales volume but in the second quarter the automaker booked a pretax loss of $483 million for its operations there.

Executives have noted the combination of lower prices and falling sales, particularly in the hot crossover and SUV market, had hit the company hard.

Ford is due to report third-quarter earnings later on Wednesday.

Chen’s appointment comes as Ford restructures operations worldwide, and its China business will now become stand-alone business unit, reporting directly to global headquarters. Chen will report to Jim Farley, president of global markets.

“China is absolutely essential to Ford’s profitability and growth,” Farley said in a statement, adding the new structure would help the China operation be “more fit as a business, increase our decision-making speed and be closer to our customers.”

Chen’s predecessor Jason Luo - also brought in to turn around the business - resigned abruptly in January this year after roughly five months in the job.

Industry insiders said Chen’s arrival would help Ford in the market - including mending bridges with its partners Changan Automobile Group and Jiangling Motors Group - but that success was no sure thing.

Tensions in Ford’s China partnerships have hurt the morale of the joint ventures’ sales forces, especially after the U.S. automaker tried to streamline its two separate brand identities and its dual distribution systems, sources have previously said.

Jiangling Motors said it welcomed the appointment.

“We are very pleased to see that Ford is paying more and more attention to the Chinese market and better implementing its ‘In China, for China’ strategy,” a spokesman for the company said in a text message to Reuters.

Other appointments this year that have brought in Chinese expertise include naming Henry Li, a former senior sales executive at Mercedes, as vice president for sales and marketing in China.

Mao Jingbo became chief of Lincoln Asia Pacific and China after serving at Mercedes’ Chinese operations for more than ten years, while Richard Chen, a former Key Safety Systems executive, became Ford’s vice president of strategy and partnership for Greater China.

Reporting by Yilei Sun and Adam Jourdan; Additional reporting by Norihiko Shirouzu; Editing by Edwina Gibbs

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