Changan to make Ford car under own brand

Chongqing Changan Automobile is in talks with partner Ford Motor to produce a mid-sized car in China using Ford technology but carrying a Changan brand, as they move to take their partnership to a new level, two sources said on Monday.

Changan, one of China's top state auto groups but which lags in its own brand sedans, has been making Focus, Mondeo, Fiesta and other Ford models in a three-way tie-up with the Detroit automaker and Mazda Motor.

The initiative, if it goes ahead, would mark a breakthrough in their partnership and pave the way for more, mutually beneficial deals in the years to come, sources said.

"Ford CEO Alan Mulally met Changan Chairman Xu Liuping during his trip to China in March. They had in-depth talks on ways to bring their cooperation to the next level," one source with direct knowledge of the matter told Reuters.

One option both partners are seriously considering would see Changan making a mid-sized sedan based on a Ford platform in its own production base in Nanjing, close to Shanghai, said a second source who was briefed on the matter.

The sedan will be sold under Changan's name, but will be priced lower than the comparable Ford model to avoid direct competition. Ford will then get a sizeable share of the proceeds, both sources said.

It is unclear at this stage which of Ford's car models will be made at Changan's Nanjing production base, both sources said.

Changan's spokesman declined to comment, while Ford's China spokesman, Craig Von Essen, said it was "market speculation".