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September 26, 2009

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Home » Business » Auto

Ford revs up Chinese operations

FORD Motor Corp yesterday began construction of a new plant in Chongqing to speed up its expansion in China in its bid to grab 5 percent of market share by 2014.

The US$490 million facility, Ford's second in Chongqing and third in China under its passenger car venture, Chang'an Ford Mazda Automobile Co Ltd, will be able to make 150,000 vehicles a year.

It will lift Ford's total car production capacity in China to 600,000 vehicles when it is completed in 2012.

"The announcement reinforces our commitment to the further expansion of our Chinese operation to meet the continued rise in demand from Chinese consumers," said Ford's President and Chief Executive Officer Alan Mulally, who was at the groundbreaking ceremony.

He said the facility would begin producing the next generation of the Ford Focus in 2012.

For Ford, the only one of the United States' Big Three car makers to survive the global auto slump without financial aid from the US government, the new plant is an important step as it strengthens its business in the Asia Pacific and Africa.

From January to August, sales of Chang'an Ford Mazda rose by 30 percent to 144,601 vehicles in China, in line with the industry average.

While not selling as many vehicles as its major competitors, such as GM and Volkswagen, Chang'an Ford Mazda still reported record August sales of 21,127 units with year-on-year growth of 111 percent.

Sales of Shanghai Volkswagen and Shanghai General Motors both topped 60,000 units last month.

"We still have promising market expectation for Ford in China because it has developed some very competitive vehicles that fit the market demand," said Yale Zhang, director of the automotive consulting firm CSM Asia Corp in Shanghai.

Jeffrey Shen, chairman of CFMA, dismissing earlier market reports, said there was no change in the shareholding of the venture despite Ford reducing its stake in Mazda globally, weakening its ties with the Japanese counterpart.

Chang'an Ford Mazda is 50 percent owned by the state-owned Chang'an Automobile Group with Dearborn-based Ford taking 35 percent and Mazda the remaining 15 percent.

It produces the Ford Focus, Mondeo, S-Max and Volvo models in a factory in Chongqing. It also has another plant in Nanjing, making Fiesta and Mazda cars.


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