Shares of Ford Motor Co. (NYSE: F) were down by 1.3% in mid-day trade on Wednesday as reports emerged of its joint venture in China being hit with a fine by Chinese regulators for antitrust violations.
Changan Ford Automobile Co. was reportedly handed a fine of 162.8 million yuan ($23.6 million) by the State Administration for Market Regulation for restricting resale prices on its cars in Chongqing city. The fine amount comes to 4% of Changan Ford’s annual sales in Chongqing.
The Changan Ford joint venture was created between Ford and Chinese carmaker Changan Automobile with each partner owning 50-50 of the entity. After the US, China is the second largest market for Ford but the company has been seeing sales declines in the region.
The fine comes at a time when Ford is taking measures to drive sales growth in China and amid trade tensions between China and the US which has left several companies and investors in a state of concern.
After the US imposed a ban on Chinese telecom company Huawei Technologies, China threatened to retaliate with a blacklist on foreign firms. China is already said to be investigating FedEx Corp. (NYSE: FDX) for misrouting its parcels to the US.