China’s State Administration for Market Regulation slapped Changan Ford with a 162.8 million yuan ($23.6 million) fine for setting minimum resale prices on its cars in the city of Chongqing, according to a statement posted on the regulator’s website on Wednesday.
The fine amounts to 4% of the company’s sales in Chongqing last year. Ford (F
) owns 50% of the joint venture, with the rest controlled by its local partner, state-owned carmaker Changan Automobile.
Changan Ford’s actions deprived downstream dealers of pricing autonomy, restricted competition and damaged the legitimate interests of consumers, the regulator said.
Ford said it “respects” the market regulator’s decision.
“Changan Ford has taken corrective action in its regional sales management together with its dealers,” a Ford spokesperson 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 move on a storied American carmaker comes at a tense time in US-China relations.
The penalty also comes as Ford is looking to make up lost ground in China.
The carmaker 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 tries to reverse a decline in sales in the world’s biggest auto market.
China is Ford’s second biggest market after the United States. But like other carmakers it is feeling the effects of China’s slumping auto industry
— Ford’s sales in the country plunged by nearly 40% in 2018 compared to the previous year.
Ford Motor Co. shares were trading at $9.71 per share on Wednesday afternoon, down $0.21 (-2.12%). Year-to-date, F has gained 31.21%, versus a 13.48% rise in the benchmark S&P 500 index during the same period.
F currently has a StockNews.com POWR Rating of B (Buy), and is ranked #2 of 25 stocks in the Auto & Vehicle Manufacturers category.
This article is brought to you courtesy of CNN.