Ford Motor Co.’s (NYSE: F) main joint venture in China has been fined nearly $25 million by China’s antimonopoly authority, the State Administration for Market Regulation. Changan Ford, which is owned equally by the Detroit automaker and its local partner, state-owned carmaker Changan Automobile, was levied the fine for setting minimum prices for its dealers in Chongqing, where the company is based. The fine amounts to 4 percent of the company’s sales in Chongqing last year.
According to a statement posted on the regulator’s website, Changan Ford had set a minimum resale price for its cars in Chongqing since 2013. That action violated the law and deprived dealers of the autonomy to set their own prices. The regulator said that the action also restricted competition and damaged the legitimate interests of consumers. During the investigation, the joint venture did not provide evidence of compliance with the country’s anti-monopoly law.
In a statement, a Ford spokesman said Changan Ford had taken “corrective action” with respect to its sales policies. “Changan Ford will continue to ensure its business activities contribute to a free and fair competitive environment,” the statement said. Ford is not the first automaker Chinese regulators have targeted on similar grounds.
China is Ford’s second biggest market after the United States, but the Chinese economy is slowing, putting a damper on sales. Ford’s sales in the country plunged by nearly 40 percent in 2018 when compared to the previous year. The number of cars sold by Changan Ford in April fell by more than 60 percent from a year earlier. The automaker is now planning to launch more than 30 new Ford and Lincoln vehicles in China over the next three years in a bid to reverse the sales decline.