Ford Motor Company (NYSE:F) announced recently that its China Chief Jason Luo has unexpectedly resigned from the company after leading Ford’s China-based operations for about five months. Luo submitted his resignation with immediate effect stating his personal reasons, according to Peter Fleet, head of Ford’s Asia Pacific operations.
Prior to his resignation, Luo was in charge of Ford’s operations in China which include the company’s import business, Lincoln, passenger car joint venture Changan Ford, the commercial vehicle investment located in Jiangling Motors Corporation and the Dearborn Michigan operations in Taiwan.
The sudden resignation has raised critical questions as to whether the automaker company would be in a position to resolve its sales slump in the global car market. Luo was poached from the Key Safety Systems with the hope that he would help the company to improve its revenue collection within the region.
Luo was overseeing about $920 million sales in China’s Ningbo Joyson Electronic and about $1.6 billion purchase of assets from the bankrupt Japanese company, Takata Corp. Ford has already accepted Luo’s resignation to give him the right of way and Fleet commented that the resignation is not related to the company’s business strategy or performance and that the replacement would be made in the near future.
Luo’s departure is a major blow to the company, which is falling behind its rivals in terms of the sales in the market. Ford’s sales slumped 6% in 2017 in comparison to the 3% rise for the industry in general. Luo was playing a major role in helping the company to enhance its ties with the local partners in the region including the Chongqing Changan Automobile Co. and how to respond to the demands of the local consumers.
Foreign companies in China are facing stiff competition from the local firms, who aggressively and frequently launch new car models to maintain their market share. In addition, the market is distorted by the ongoing government support programs for electrical vehicles, which forces Ford and other foreign firms to partner with local companies for expansion.