Ford cements China ties, sees return to profit

Ford Motor Co said it expects to return to the black in 2011, as it expanded ties with the fast-growing and lucrative China market with plans to build a new $490 million plant there.

The U.S. automaker, which competes with General Motors [GM.UL] and others globally, produces the Focus, Mondeo and other sedan models in China in a tie-up with Chongqing Changan Automobile Co and Japan's Mazda Motor.

The plant, to be based in the southwestern city of Chongqing, will have an initial annual production capacity of 150,000 units, increasing annual capacity at Ford's joint venture plants to 600,000 by 2012, according to a joint venture statement on Friday.

The 3.34 billion yuan Chongqing plant marks the latest connection for Ford in the country, which surpassed the United States in January to become the world's biggest automobile market.

When asked if Ford can return to profitability in 2011, Chief Executive Officer Alan Mulally, attending a ground-breaking ceremony for the new plant, told Reuters: "Absolutely, we are on plan."

He said Ford expects to have around 16 percent market share in the U.S. market in 2009, where it expects industry-wide sales of up to 11 million vehicles for the full year.

"We think that the market is probably going to be about 10.5 to 11 million units (in the United States). We are around 16 percent of market share," Mulally said.

Ford posted about $30 billion in net losses from 2006 and 2008 and has been restructuring its operations in the past four years, including job cuts, plant closure and sales of several brands from its former luxury division.