Ford Motor (NYSE:F) said its sales in China fell 30.3% in the third quarter from a year ago to 131,060 vehicles, as trade-war politics and a weak auto market continued to exacerbate Ford's ongoing slump in the region.

Year to date through September, Ford's sales in China are down 29.2%.

The raw numbers

Ford China's current leadership has sharply reduced the amount of information it shares around sales, meaning it no longer releases detailed model-by-model sales information. But it did share a few key figures for the third quarter:

  • Sales of Ford-brand vehicles, including both imports and Fords manufactured in China, totaled 77,443 in the third quarter. That's down 37.7% from the same period last year, and down 16.6% from its second-quarter total.
  • Lincoln vehicle sales fell 24.1% from a year ago, and 6.3% from the second quarter, to 11,618.
  • Sales of the JMC-brand trucks produced by Ford's joint venture with Chinese truck-maker Jiangling Motors fell 13.3% from a year ago, to 41,999 vehicles. That's down 13.9% from the second quarter of 2019.
A white Ford Territory, a compact SUV, parked outside an upscale home.

The Ford Territory, a low-cost SUV developed specifically for China, helped drive month-to-month sales increases for Ford in the third quarter. Image source: Ford Motor.

What happened with Ford in China in the third quarter

While the overall sales number wasn't good, Ford wants auto investors to know that within the quarter, the sales trend was moving in the right direction. Ford-brand sales in September were up 5% from August and 25% from July, the company said, while Lincoln's September sales were up 11% from August and 13% from July.

What's moving the needle? Some new (and new-ish) models. Ford's biggest challenge in China over the past couple of years was a sense that its products were dated. China's new-car market is huge, with nearly all of the global automakers competing head to head with a long list of domestic Chinese auto companies.

All of that competition means there are always new products for consumers to choose from. Products that are four or five years old, like much of Ford's China lineup until recently, tend to be overlooked by many Chinese car-shoppers. That was the core of Ford's problem in China: Ford's brand had all but slipped out of view, and its dealers began to lose confidence.

But Ford has begun taking steps to right the ship. Back in April, Ford announced its "China 2.0" plan, a sweeping turnaround effort that will include over 30 new models for China by the end of 2021. Several of those new models have already arrived, and Ford credited a few of its recent arrivals -- including the Lincoln Nautilus crossover and the China-only Ford Territory SUV, now available in a battery-electric version -- for the month-to-month sales improvements within the quarter.

How Ford's China sales result will affect earnings

Ford lost $283 million in China in the first half of 2019. That's not good, but it was a big improvement over the $633 million it lost in the first half of 2018, and there have been growing signs that Ford China CEO Anning Chen has the business moving in the right direction.

I don't expect Ford to report a profit in China when it releases its third-quarter earnings results on Oct. 23. But despite the year-over-year sales decline, I do expect a substantial improvement over the $378 million loss it posted in China in the third quarter of 2018.