Ford Increases Ownership Stake in Ghina's Jiangling Motors

SHANGHAI August 11, 2005; Reuters reported that Ford has raised its stake in China's Jiangling Motors to 30 percent, after buying 0.04 percent of the Chinese company's shares on the open market, the Shenzhen-listed auto maker said in a filing published in state media on Thursday.

The additional purchase was worth about 1.06 million yuan ($130,800), based on Jiangling's latest closing price on Aug. 5 of 3.30 yuan per B share.

The U.S. motors firm bought 321,400 B shares, which are open to foreign investors, Jiangling said in the filing published in the China Securities Journal.

Ford, which also makes cars in China with Changan Automobile Co. Ltd., Shenzhen, bought the additional 0.04 percent of Jiangling Motors Co on the open market, Jiangling said in a filing carried in official state media.

Ford bought 321,400 Hong Kong dollar-denominated B shares, which are open to foreign investors, Jiangling said, worth about HK$1.06 million ($136,000) based on Aug. 5's closing price of 3.30 yuan.

The company's shares had been suspended from Monday until trade resumed on Thursday.

"Ford Motor Company has the intent to further acquire equity shares in Jiangling," the company said in an e-mailed statement, adding they were "committed to help Jiangling grow stronger and become a leading commercial vehicle manufacturer in China." Changan won regulatory approval in July to take control of Jiangling in a complex acquisition seen as a sign of further consolidation in a fragmented industry with over 100 players. The industry has also been in a protracted slowdown for over a year.

Changan said then that it would offer Ford an option to buy another seven percent stake in Jiangling after three years. Changan, China's top maker of minivans, also assembles compact cars with Japan's Suzuki Corp. It is now the country's fourth largest vehicle maker after Shanghai Automotive Industry Corp., First Automotive Works and Dongfeng Motors.

Ford, which intends to invest $1 billion in China in coming years, is a relative latecomer to the country, now the world's third largest vehicle market and where Volkswagen A.G. and General Motors Corp. have been making cars for years.