Chinese regulators charged Ford’s joint venture, one of its main in the city of Chongqing with violation of antitrust laws. Changan Ford, a joint venture between Ford and its local partner, Changan Automobile; a state-owned company was levied a fine of 162.8 million yuan or $23.6 million by China’s State Administration for Market Regulation for determining its cars’ minimum resale prices in the city. Ford has a 50% controlling stake in the joint venture with the remaining held by Changan Automobile.
The regulators contended that the actions of the joint venture disabled other dealers from autonomy in pricing, limited competition and harmed the lawful interests of the consumer.
Ford responded by stating that corrective steps were undertaken in sales management of the region in consultation with its dealers. They emphasized that they were bound to do business respecting the laws and regulations of the region.
The move on the part of the Chinese regulators could not have come at a worse time for the US automaker who was struggling to recover lost ground in the country. Ford is trying hard to reverse its declining sales trend in China, which is its second largest market following the US. Sales of Ford had slumped by around 40% in 2018 in comparison to the earlier year; an after effect to a large extent of the falling auto industry in China. An announcement was made by the automaker in April to introduce about 30 of its new vehicles in China in the following three years.
However, the tit-for-tat retaliatory actions by the US and China who have been locked in the on-going trade war has shaken economies around the world and also the investors.
Washington’s backlisting of Chinese tech giant Huawei was followed by China declaring the formation of its own blacklist for overseas companies. China also had declared its intent to investigate into FedEx services after complaints came from Huawei regarding delivery in the earlier half of the week.