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Ford’s China business hit with $23.6 million fine



The Chinese State Administration for Market Regulation slapped Changan Ford with a fine of 162.8 million yuan ($ 23.6 million) for setting minimum resale prices on its cars in the city of Chongqing, according to a statement published on Wednesday in the regulator website.

The fine amounts to 4% of the company's sales in Chongqing last year. Ford (F) it owns 50% of the joint venture, and the rest is controlled by its local partner, the state-owned automobile manufacturer Changan Automobile.

Changan Ford's actions deprived distributors of price autonomy, restricted competition and damaged the legitimate interests of consumers, the regulator said.

Car sales fall in China for the first time in 20 years

Ford said it "respects" the decision of the market regulator.

"Changan Ford has taken corrective action in its regional sales management along with its dealers," a Ford spokesman said in a statement.

"As an ethical company, Ford is committed to complying with local laws and regulations wherever we do business," the spokesperson added.

The movement in a famous American automaker comes at a tense moment in relations between the United States and China.

Huawei could be the first major victim of China's clash with the United States

The escalation of the trade war between the two countries and the punitive tit-for-tat actions have sent shivers through the global economy and has shaken investors.

After Washington banned US companies from supplying critical components and software to Chinese technology giant Huawei, Beijing announced that it was establishing its own blacklist for foreign companies.
Earlier this week, the Chinese government said it is investigating FedEx after Huawei said the delivery company diverted two packages to the United States to the company's offices in China.
Ford will present 30 new models in China for 3 years.

The penalty also occurs when Ford is trying to recover the lost ground in China.

The automaker announced in April that it plans to launch more than 30 new Ford and Lincoln vehicles in China over the next three years as it attempts to reverse a decline in sales in the world's largest auto market.

China is the second largest Ford market after the United States. But like other automakers, it is feeling the effects of the fall of China's auto industry: Ford's sales in the country dropped almost 40% in 2018 compared to the previous year.

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