Ford says China Jiangling Venture on Target

09/04/96

Reuters reported that Ford Motor Company said that the steep fall its Chinese partner experienced in first-half profits would not affect the companies' plans to introduce light commercial vehicles through their joint venture late next year. Vaughn Koshkarian, president of Ford Motor Ltd. in China said, "the drop in profits will not delay the project."

Earlier this month, Jiangling Motors Corporation Ltd (Ford's Chinese partner) announced that its net profits for the first half of 1996 had tumbled 77 percent to 3.39 million yuan, due to a slow market. Ford has a 20 percent stake in the venture with Jiangling.

Chinese car and truck manufacturers have been hurt by the Chinese government's prolonged austerity program, which has kept inflation from surging in China. This year, however, inflation has been well within government target ranges, and the central bank has been able to ease its tight money policies, cutting interest rates twice in less than four months.

Koshkarian estimated that China's overall market for cars and trucks this year would be 1.5 million, about the same as it was in 1995. The second half of 1995 included an upturn in activity.

Ford is part of five joint venture companies making auto parts in China, and has invested $250 million in the market in China.

Paul Dever -- The Auto Channel