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June 17, 2014

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Home » City specials » Hangzhou

Steering the economy into a bold new era

By Lu Nengneng | June 17, 2014, Tuesday | Print Edition

HANGZHOU is putting the pedal to the metal as Ford will open a joint venture plant with its Chinese partner Changan in January, 2015.

Construction has recently been completed on facilities and equipment is now being installed and tested at the plant, which will churn out the first mid-to-high-range vehicles made in Hangzhou.

The Changan Ford plant covers 370,000 square meters near the mouth of the Qiantang River in the Qianjin Industry Park of the Hangzhou Economic and Technological Development Area. The plant is expected to cost 7.5 billion yuan (US$1.2 billion).

The plant is counted on to fuel Ford’s aggressive expansion in China. It aims to bring 15 new car models to the biggest and most vibrant auto market in the world by 2015.

The new plant also represents Ford’s reinforced commitment to the Chinese market and sets a firm base for further growth, said Joe Hinrichs, president of Ford Asia Pacific and Africa.

Initially the plant will have an annual capacity of 250,000 units with this rising to 500,000 after the second phase. The plant will set a new example in economy of scale by generating more than 100 billion yuan worth of output each year.

“We will try our best to bring the latest and most advanced technologies and car models to Hangzhou,” said Allan Mullaly, president and CEO of Ford Motor Co. “The assembly line in Hangzhou can make seven different car models because of its flexibility, which can significantly reduce the cost of introducing new models and restyled versions, and speed up our response to the market.”

Coming off the assembly line will be the latest generation of Ford vehicles made with the help of the most advanced equipment in the industry. Ford has the highest automation rate among carmakers in Asia Pacific.

More than 600 robots will assemble vehicles at the new plant, reducing labor costs while improving quality. The welding workshop can make six car models on the same production line, with robots executing precise spot welding.

The paint workshop boasts Ford’s first water-based paint production and APA automatic spray lines.

Changan Ford is also dedicated to building a local talent pool by providing training at the company’s headquarters.

About 800 workers are now on board at the new plant, all well educated and highly skillful. Ongoing recruitment will ensure the plant is fully staffed before it begins operations in January.

The plant represents how quickly Hangzhou can accomplish things. Only one year after the project kicked off, it moved to the equipment installation stage. This wouldn’t be possible without support from the city government, which has streamlined the working procedures in different departments to push through the project as quickly as possible. It even established a weekly communication channel with Changan Ford when the project was initiated in 2012.

The government is keen to help as an auto plant can drive a city’s economy. A vehicle manufacturing base can reportedly bolster the auto parts industry significantly. In the case of Changan Ford Hangzhou, the regional auto parts industry may benefit in excess of 100 billion yuan annually.

Beneficiaries include auto parts manufacturers and logistics companies. Some suppliers have already located near Changan Ford’s new plant.

Soon after the Changan Ford project was established, a plan to build an auto parts industrial park was put on the timetable. Thus far, 14 auto parts companies have made it home, including six Fortune 500 companies and seven top 100 auto parts makers. They have invested a combined 5 billion yuan.

And it is just a start. In the future, the industrial park is expected to accommodate more than 30 auto parts makers, attract over 10 billion yuan in investment and generate 100 billion yuan worth of output annually.

According to the industrial park’s management team, the second phase of the Changan Ford project will begin shortly after completion of phase one.

The city is also in talks with Ford about a new energy car plant. And to increase energy usage efficiency, Changan Ford plans to install solar panels on the roof of its 370,000-square-meter plant.

With the value chain cluster in the making, the plant will take Hangzhou’s economy to the next level in terms of scale and quality.

Hangzhou


 

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