Bloomberg News

Ford Opens Plant in China, Increasing Capacity by a Third

February 28, 2012

(Updates with dealership target in sixth paragraph.)

Feb. 24 (Bloomberg) -- Ford Motor Co. opened its third passenger-car factory in China today, increasing the automaker’s manufacturing capacity in the country by a third to more than 600,000 vehicles annually.

The $490 million assembly plant, set up by the Dearborn, Michigan-based company’s venture with Changan Automobile Group Co., spans across 1 million square meters in the southwestern Chinese city of Chongqing and will produce the new-generation Focus sedans, Ford said in a statement today.

“This new flexible plant will help give us the capacity to realize our aggressive growth plans for the world’s largest automotive market,” David Schoch, chairman of Ford China, said in the statement. The production line at the new factory will be able to make six different vehicle types, the automaker said.

Expansion in the world’s largest vehicle market is part of Chief Executive Officer Alan Mulally’s push to increase annual global sales by 50 percent to 8 million vehicles by 2015 and have one third of its deliveries in Asia by 2020. Ford plans to bring 15 new models to China by 2015.

Vehicle sales growth in China slowed last year from 32 percent in 2010 after the government withdrew a two-year package of tax breaks and rebates that helped the country overtake the U.S. Total auto sales, including those of commercial vehicles, grew 2.5 percent in 2011, according to the China Association of Automobile Manufacturers. The industry group forecasts deliveries will probably accelerate to 8 percent this year.

Ford expects China’s vehicle market to expand 5 to 10 percent this year, Schoch said. The automaker will add 115 dealers this year, with at least 50 percent of them outside the so-called Tier-1 cities, said Marin Burela, president of Ford’s China venture. The company had 465 dealers in the country as of the end of last year.

--Liza Lin. Editors: Chua Kong Ho, Young-Sam Cho

To contact Bloomberg News staff for this story: Liza Lin in Shanghai at llin15@bloomberg.net

To contact the editor responsible for this story: Young-Sam Cho at ycho2@bloomberg.net


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