Changan Auto to build cars in Mexico, eyeing US market

Changan Automobile Group, Ford Motor Co's China partner, plans to build a manufacturing plant in Mexico with a local firm and aims to export cars to North America, its vice president said on Thursday.

"We have signed an initial agreement with our Mexican partner to make compact and mid-sized cars there. The plant would start operation at the end of 2009 or early 2010," Luo Minggang said on the sidelines of an auto forum organised by the China Europe International Business School in Shanghai.

Luo did not identify the Mexican partner, which makes and distribute vehicles, but said the plant, which gives Changan a foothold in the North American market, will have an initial annual capacity of 50,000 cars.

Cars made at the facility will be sold initially in Mexico where Changan is already selling mini vans and mini trucks, but they will be shipped to the United States eventually, he said.

He declined to give a timetable, citing the current slump in the North American car market, which has pushed General Motors and others into deep losses.

Changan is among a growing number of Chinese automakers, including top player SAIC Motor Corp, hoping to emulate the global successes of their Asian rivals with internally designed and manufactured cars.

Brilliance, parent of Brilliance China Automotive Holdings, secured a deal in 2006 to sell 158,000 sedans to Europe over the next five years.

Brilliance, which runs a venture with BMW in China, said in July that it would ship its first BS4 sedans to Germany, aiming to bolster its fortunes in the hotly contested market after poor crash test results hurt sales of a previous model.

Hong Kong-listed rechargeable battery maker BYD Co has signed up 10 distributors for its plug-in hybrid car in Europe ahead of its targeted entry into that market in 2010, a senior company executive told Reuters last month.