FORD CALLS CHINESE CAR COMPANIES AN 'EXISTENTIAL THREAT'
The Blue Oval admits that "these guys are ahead of us."
Gone are the days when Chinese car manufacturers were the laughingstock of the automotive industry. Not only have they (largely) stopped ripping off designs of established brands, but they’ve seriously stepped up their engineering game. With an abundance of cheap labor and access to raw materials some international automakers can only dream of, they're now a force to be reckoned with.
Following a visit to China that involved testing local cars, Ford's boss had a revelation. The Wall Street Journal cites Jim Farley telling board member John Thornton that Chinese EV makers are "an existential threat." During one of his trips, the CEO was joined by Chief Financial Officer John Lawler, who candidly admitted that "these guys are ahead of us."
Ford's head honcho says he's "seen this movie before," referring to the rise of Toyota, Honda, and other Japanese automakers and their ability to grab sales from American brands since the 1980s. Similarly, Farley associated the growing impact of Chinese car manufacturers with how Hyundai and Kia have vastly improved in recent decades, especially in terms of EVs.
How is Ford fighting back? In early February, Farley announced a "skunkworks team" is working on a new platform dedicated to affordable EVs to battle the Chinese but also Tesla. In the meantime, it's about to launch a fully electric Puma small crossover but that's unlikely to be sold in the United States. The main market for the Puma-E is likely to be Europe where the company recently delayed its ambitious goal to go purely electric by 2030.
EVs carrying the Blue Oval have been few and far between. An electric three-row SUV was supposed to come out in 2027 (after being delayed from the original 2025 launch date) but it was ultimately canceled last month. In addition, Ford is reducing EV spending by 10% and delaying the next-gen electric F-150 pickup truck for a second time. It was initially scheduled for 2025 before being pushed back to 2026 and now to 2027.
You could say Ford has made some rather interesting decisions in recent years. Last year, it discontinued the Fiesta, one of Europe’s most popular cars. The supermini's demise follows the Mondeo's discontinuation in 2022, with the Focus heading to the car graveyard in 2025. These three cars have been dead for a few years in the US where the Mondeo was sold as a Fusion. The bigger Taurus was retired in 2019.
Plenty of governments around the world have realized the Chinese threat and are implementing tariffs on EVs built in China for export markets. Last week, the Biden administration locked in a stiff 100% duty on Chinese EVs. The U.S. Trade Representative's office has announced the import duty will come into effect on September 27.
Also happening next week, the European Union is expected to vote on higher tariffs. According to Automotive News Europe, the EU wants to slap SAIC with duties of 36.3%. Volvo's parent company Geely could be hit with 19.3% while BYD cars shipped to Europe would face a 17% tariff. However, Bloomberg reports that these rates are likely to decrease.
The Chinese Are Coming:
2024-09-19T10:51:16Z dg43tfdfdgfd