Ford warns China car sales may see first fall since 1990

http://www.bbc.co.uk/news/business-33695832

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Ford has predicted industry-wide sales will be flat or fall in China this year - the world's biggest car market.

The car giant expects 23 million to 24 million car sales in China, compared with 24 million last year.

"At best we're saying flat, probably down," Ford's chief financial officer Bob Shanks told the BBC.

If sales do fall, it would be the first time since 1990 that there has been a drop, he added.

Despite the overall picture, Ford itself expects to do "quite well" in China due to four new car models and a new factory, Mr Shanks said.

He said falls in commercial vehicle sales were driving the overall decline in industry sales in China.

"That's usually closely tied to consumer confidence, investment in business and so forth.

"So we think this is just a side effect of the government's move to transition the economy from one that's more export oriented and investment focused to one that's more consumer oriented," he added.

Its forecast came after the car company reported a $1.9bn net income for the second quarter of 2015 - up 44% on the same period a year ago - driven largely by a strong performance in North America and its popular F-150 pick-up truck.

The performance came in spite of supply issues, with North American dealerships not all having the truck, an issue that Mr Shanks said would be resolved by the end of the third quarter.

It also reported $37.3bn in sales for the period, around $2bn higher than expected.

Overall profit rose in Asia Pacific despite a dip in its China sales, which Mr Shanks said was because it had adjusted its production to meet the lower demand.

For the full year, Ford was upbeat, saying it expected its profit for the second half to be bigger than that of the first half.

"It's all good right now," said Mr Shanks.