BEIJING (Reuters) - Ford Motor Co’s joint venture with China Changan Automobile Group has decided not to renew its contract with some agencies supplying it with workers, as carmakers struggle to cope with slumping sales in China.
The New York Times reported earlier that the Ford-Changan joint venture has “quietly begun” dismissing thousands of its 20,000 workers in the world’s second-largest economy.
Ford did not comment on how many of its workers were being supplied by the agencies.
China’s car sales fell 2.8 percent in 2018, according to China’s Association of Automobile Manufacturers (CAAM), marking the first contraction since the 1990s. Slowing economic growth as well as the fallout of trade frictions with the United States have hurt demand.
Ford suffered an even deeper sales slump of 36.9 percent last year in China, due to lack of new and significantly redesigned models, especially SUVs for the market.
Company executive told Reuters last year it was unlikely that Ford’s sales will regain momentum in China until later in 2019 when the first new vehicle models arrive in showrooms in large enough numbers.
Beijing has in recent months pledged various measures to boost private consumption to prop up growth, including subsidies to boost rural sales of some vehicles and purchases of new energy vehicles. January’s car sales fell 15.8 percent from a year earlier, however, and CAAM does not expect annual sales growth in 2019.
Reporting by Norihiko Shirouzu and Yilei Sun; writing by Se Young Lee; editing by Jason Neely and Elaine Hardcastle