Ford mulls new China car plant

Ford Motor Co, which is closing factories in North America, is mulling a new car plant in China with its Japanese unit Mazda Motor Co and local partner Chang'an Motor Corp, to meet growing demand.

Kenneth Hsu, spokesman for Ford's China operations, told China Daily: "We are gauging the need for further expansion of our manufacturing capacity. We are considering all kinds of options."

The US carmaker plans to reach a final decision by early next year, Hsu said, declining to give details.

"Local governments are keen to have a new plant from Ford in their regions," he said.

Chang'an Ford Mazda Automobile Co, a tripartite joint venture, now has two factories in the western municipality of Chongqing and Nanjing in the east with a combined production capacity of 410,000 cars a year.

Jeffrey Shen, president of the venture, said it will move 225,000 cars this year, mainly boosted by the hot-selling Focus compact model, up from roughly 160,000 units in 2006.

The venture's 2008 sales are expected to reach 300,000 units, Shen said.

The tie-up, whose current line-up also includes the Ford Mondeo and S-Max, Mazda3 and Volvo S40, plans to produce a subcompact based on the Verve concept before the end of next year, Shen said. The Verve made its Asian premiere at a recent auto show in Guangzhou.

The venture will also launch the Mazda2 subcompact in 2008.

"Our profitability is fairly good," Shen said, without elaborating.

Chang'an holds a 50 percent stake in the venture, Ford 35 percent and Mazda 15 percent. Mazda is one-third owned by the Detroit-based group.

Shen predicted that total vehicle sales in China, the world's second-biggest auto market after the US, will hit 9 million units this year and 10 million units in 2008, propelled by the country's booming economy. Last year, sales amounted to 7.22 million units.

Other foreign carmakers, such as Toyota, Volkswagen, PSA Peugeot Citroen and BMW, are also planning to build more production capacity in China.

Ford also owns a 30 percent stake in another Chinese automaker Jiangling Motors Co Ltd, which makes Transit commercial vehicles in the eastern city of Nanchang.

The struggling US carmaker said two years ago it planned to shut down at least 10 plants in North America by 2010 as part of its turnaround plan.