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Ford spends $350M on Chinese transmission plant

Michigan auto-maker looking to catch up with GM in China


May 19, 2011
by The Canadian Press

DEARBORN, Mich—A Ford Motor Co. Chinese joint venture is spending $350 million to build a transmission plant in China.

The company says the factory in Chongqing in southwest China will be able to build 400,000 six-speed automatic transmissions a year. It will make them for Changan Ford Mazda Automobile Limited, the Chinese joint venture.

While Ford’s presence in China is relatively small, it says the new plant is part of its growth strategy there.

Construction is expected to start in July and production will begin in late 2013.

Ford is also building a $500 million engine plant in Chongqing.

Last year, China’s auto market overtook the U.S. as the world’s largest. Sales rose 32 per cent last year to over 18 million vehicles, but have slowed to single- digit growth so far this year.

“Together with prior investments announced in the past few years, this new plant demonstrates Ford’s unprecedented commitment to the China market,” says Joe Hinrichs, president of the company’s Asia Pacific and Africa region.

Ford’s sales in China rose 15 per cent during the first four months of the year to 184,906 vehicles.

But it was still a tiny fraction of the 6.53 million vehicles sold nationwide from January through April, according to the China Association of Automobile Manufacturers.

Ford plans to introduce 15 new vehicles to China by 2015, Hinrichs said.

Changan Ford Mazda makes the Mondeo midsize car, the Focus compact, Fiesta subcompact and S-Max small van for sale in China.

The Dearborn, Mich., automaker got a late start in China and is trying to catch up to its main U.S. rival, General Motors Co., which sells more vehicles in China than it does in the U.S.