Ford, Changan Group Agree to Expand Production And Build New Car and Engine Plants in China
Investment to increase by $1 billion; capacity to rise to 150,000 units a year
* New memorandum of understanding signed with Changan Automobile Group to expand manufacturing capacity, increase product introductions and jointly explore more automotive business opportunities * More than $1 billion planned for future expansion * Production capacity at Changan Ford in Chongqing to increase to 150,000 units a year * Future expansions to include a second car plant and an engine plant
BEIJING, Oct. 16 -- Chairman and Chief Executive Officer Bill Ford today announced that Ford Motor Company and its partner in China, Changan Automobile Group, signed a new memorandum of understanding that will quickly expand Ford's presence in China.
Ford Motor Company and Changan will invest more than $1 billion over the next several years to expand manufacturing capacity, introduce new products and expand distribution channels in the Chinese automotive market. The investment will initially support the addition of new products and expansion of production capacity at its joint venture, Changan Ford in Chongqing, from the current 20,000 units a year to 150,000, as well as establish a second car plant and new engine plant. Details concerning locations of the new plants and the products that will be manufactured will be announced at future dates.
"I can think of no better way to celebrate our centennial year than by announcing plans for expansion," the chairman of the world's second largest automaker said.
"The automotive future of China is very bright, and we are participating fully in its growth. I am pleased to reaffirm our long-term plans for China," Ford said.
On October 15, Mr. Ford and Party Secretary Huang and Mayor Wang of Chongqing witnessed the signing of memorandum of understanding that expands the strategic partnership between Ford Motor Company and Changan Automobile Group, at the joint venture Changan Ford. Mei-Wei Cheng, chairman and CEO for Ford Motor China, and Yin Jiaxu, chairman and president, Changan Automobile Group, signed the memorandum marking a new milestone in their efforts to expand.
The Ford chairman also joined senior Chongqing government and senior Changan Automobile Group leaders to break ground at Changan Ford to increase production capacity from the present 20,000 units a year to 150,000 units a year. In January 2003, the plant launched the Ford Fiesta, Ford's first domestically produced car for the Chinese market. In May, a second Ford passenger car model, Ford Mondeo, was introduced.
The expansion plans in China during the next few years also include construction of a second automotive plant as well as an engine plant. The location will be announced later.
During his trip to the People's Republic of China Mr. Ford met with state leaders and senior government officials. During his meetings with the government leaders, Ford discussed the global auto industry, the company's business in China and expressed Ford's commitment to the future development of the Chinese automotive industry.
"The rapid growth of the Chinese economy can be attributed directly to the forward-looking policies of the government and to the increasing well-being of the Chinese consumer," Ford said. "I came to Asia to see directly for myself the dynamic growth that is occurring. China, at present the second largest automotive market in Asia and potentially the largest in the world within the next generation, is the logical place to conclude what has been for me a most successful trip," he said.
"Our approach to Asia is regional in scope and encompasses our global brands," he said. "The three expansions that I have been privileged to announce this week in Thailand, the Philippines, and now, China, broaden our platform and position us well to participate in the growth that we see unfolding for many years to come."
The Ford chairman spoke to the press in Beijing on October 17. He said, "For more than 100 years, Ford Motor Company has offered customers safe, reliable, comfortable transportation at good value. Our success stems directly from the customers we serve around the world. We have made significant progress in China and look forward to bringing even more customers from China into the extended Ford family," he said.
"Ford and Changan have a solid foundation for profitable growth," the Ford chairman said. "Our passenger car joint venture, Changan Ford, launched its first product Fiesta in January, and quickly launched the second product Mondeo in May. Both have been well received by the market. We have also introduced the Ford Maverick, an outstanding member of Ford SUV family, in July. Our commercial vehicle investment, Jiangling Motors Corporation, has achieved record sales and profits. Now, with the new strategic partnership with Changan Group, we are on track to further develop Ford's business and, to become one of the key automakers in China."
