Ford Announces $1.5B Expansion in China
BEIJING October 17, 2003; Christopher Bodeen writing for the AP reported that Ford Motor Co. plans an expansion of its China operations at a cost of up to $1.5 billion in a move that should boost car production capacity to 150,000 a year from 20,000.
The U.S. automaker and its Chinese partner, Changan Automobile Group, will expand production at their factory in the western city of Chongqing, and build a second car plant and a new engine plant, Ford chief executive Bill Ford said Friday.
The partners also will introduce new products and expand distribution channels to take advantage of China's booming car market, Ford said.
"Every automobile company in the world realizes the potential for Asian growth, and we know that China will lead that growth," Ford said at a news conference.
Ford was a relatively late arrival in China, beginning auto production in 1997, and is trying to catch up with U.S., German and Japanese rivals.
Germany's Volkswagen AG makes 880,000 vehicles a year in China and recently announced a multibillion-dollar expansion to double that in coming years. General Motors Corp. recently stepped up its manufacturing capacity in China to 200,000 cars per year, according to the Asian Wall Street Journal.
Ford and Changan, each of which hold 50 percent of their joint venture, began producing the Ford Fiesta compact in January, followed by the larger Mondeo sedan in May. In July, they started assembling the Ford Maverick, a compact sport utility vehicle.
Ford also owns a 30 percent stake in Jianling Motor Corp. in the southern province of Jiangxi, through which it has produced the Transit delivery van since 1997.
Ford also has six smaller joint ventures producing auto parts and components. Its financing company, Ford Credit, has opened an office to prepare for the opening of the auto financing business to foreign companies.
During an earlier visit to Thailand, Ford announced the company and its Japanese affiliate Mazda would invest $540 million in their joint venture plant in Thailand.
That would expand the capacity of its joint venture plant, Auto Alliance Thailand, to 200,000 vehicles per year from the current 135,000.