Ford to build $760 million plant in China

ERJ staff report (AN)

Detroit, Michigan -- Ford Motor Co., in a bid to catch up with General Motors and Volkswagen AG in the world's largest auto market, said it will build a $760 million assembly plant in Hangzhou, China.

The project will help Ford double its manufacturing capacity in the country to 1.2 million vehicles a year.

In a statement released today, Ford said it will build the plant in collaboration with Changan Ford Mazda Automobile. The company is a three-way joint venture with Chongqing Changan Automobile Co. and Mazda Motor Corp. The plant will have initial capacity for 250,000 units.

Ford has not said what vehicles it will build when production begins in 2015. But the company announced a new product offensive last year that will include 15 new models and 20 new powertrains by 2015. The automaker may offer a hint of its production plans next week when it displays three as-yet unnamed SUVs at the Beijing auto show along with the new Focus.

The Hangzhou factory will be Ford's fifth passenger car plant in China. It already has three plants operating in the country with another set for construction. Ford also has a commercial vehicle plant with another under construction. The automaker further has a powertrain plant with another being built.

Today's Hangzhou plant announcement comes just two weeks after Ford unveiled a $600 million expansion of its Chongqing plant, which will add capacity for 350,000 passenger cars. And six weeks ago, Ford opened its Chongqing 2 plant, the home of the new Focus. That moved increased Ford's capacity to 600,000 units.

Ford China was founded in 1995. It has invested $4.9 billion in the country since 2006, a spokesman said.

20 million by 2020

"So far, Ford's investments in China and across Asia represent its largest and most rapid global expansion in fifty years," Joe Hinrichs, president of Ford Asia Pacific and Africa, said in the statement

"This expansion will help us realise an increase in global sales by about 50 percent from 2010 to about 8 million vehicles annually by mid-decade. Building this plant helps lay the foundation for that growth and reconfirms our commitment to China, which is expected to have sales of about 30 million vehicles by 2020."

Construction of the Hangzhou plant will start later this year. Hangzhou is a provincial city of about 4 million people in the Yangtze River delta. Venetian explorer Marco Polo once visited the city.

Ford said the new plant would give it "closer access to the large customer base in China's affluent coast areas."

From Automotive News (A Crain publication)