Ford and its Chinese partner on Friday announced they will build a third plant in China as the US automaker struggles to improve its weak performance in the world’s strongest market.
Ford will run the new 490-million-dollar plant in southwestern Chongqing through Changan Ford Mazda, its joint venture with Chongqing Changan Automobile Co and Japan’s Mazda Motor Corp, the company said in a statement.
The plant, due to open in 2012, will produce Ford’s Focus compact car with an initial capacity for 150,000 vehicles a year, the US auto giant said. AFP
The announcement from Chongqing came the day after the Dearborn, Michigan-based automaker unveiled a made-in-India compact car — part of a plan to boost sales in Asia, a region the U.S. automaker has hardly dented but is counting on to drive growth.
“Today’s announcement reinforces our commitment to the further expansion of our China operations to meet the continued rise in demand from Chinese consumers for world-class Ford products and services,” Ford chief executive Alan Mulally said in a statement.
In India earlier this week, Mulally said he expects a third of global car sales to come from Asia in 20 years, a third from the Americas and a third from Europe and Russia.
China is proving a lifesaver for all the big automakers, helping offset miseries elsewhere.
Total sales in January-August surpassed those in the U.S. for all but two months, rising to 8.33 million units, up nearly 30 percent from a year earlier, according to the China Association of Automobile Manufacturers.
Sales should soar to 12.6 million units this year, up 35 percent from 2008, boosted by subsidies that the industry is lobbying Beijing to extend, Xu Changming, a senior economist with the Cabinet’s State Information Center, said at a seminar Friday in Beijing.
The government is due to decide by mid-December, Xu said, if it will continue the subsidies, which are aimed at promoting energy-efficient vehicles.
“If the policy is extended to next year, rapid growth of auto sales will be sustained,” Xu said. “Otherwise, it will fluctuate, and it’s hard to predict the degree.” The Associated Press
Ford’s new venture puts it in line to compete with other global and Chinese carmakers in China’s still-expanding market, where rivals General Motors Corp and Volkswagen AG currently lead the way.
Most Chinese and foreign automakers are pressing ahead with bold expansion plans.
Volkswagen recently said it aims to unveil at least four new or updated models annually in China.
Vehicle sales were expected to reach 12 million in China this year, including about 10 million passenger cars, according to the government.
But some analysts have warned that the aggressive expansion plans are likely to lead to a surplus of passenger cars in China in the next few years. TopNews
Meanwhile, a top Ford executive told workers on Thursday that the company continues to face steep challenges.
Joe Hinrichs, group vice president of global manufacturing and labor affairs, told workers at the Sterling Heights axle plant that Ford must conserve cash and pay off $35 billion in debt, as well as pension and retiree health care obligations, over the next five years.
Hinrichs told workers that General Motors Co. and Chrysler, aided by more than $100 billion in taxpayer dollars, will be stronger in the future.
To survive, Hinrichs said Ford also must fund global product development. “We get through this, and we will be in a different state, as a company,” he said.
Hinrichs comments come after recent meetings with top leaders of both the UAW and CAW where Ford has asked for additional labor contract changes to match agreements that both unions granted to Chrysler Group LLC and General Motors Co. Detroit Free Press
