Ford receives approval for China engine plant


TOKYO, May 25 (Reuters) - Ford Motor Co. and two partners said on Wednesday they had received Chinese government approval for a joint venture to build an engine plant on China's wealthy east coast as part of the U.S. company's $1 billion investment programme in the world's third-largest vehicle market.

The plant, which is set to begin operations by early 2007, will have annual capacity to make 350,000 engines. Ford and partners Mazda Motor Corp and local firm Changan Automobile Co. Ltd. first unveiled the plan in late April.

Ford has said it would expand its Chinese plant to make 200,000 cars a year by 2005.

The engine plant would be located next to a Nanjing vehicle factory under construction. Initial annual capacity is about engines a year 160,000, rising to 400,000 eventually.

The plant will primarily supply engines to the nearby plant to be operated by the three partners.

It will also have the capacity to supply engines to other plants in China that produce Ford and Mazda brand vehicles.

Ford is trying to tap a surging demand in China. Car sales in China grew 15 percent in 2004 after almost doubling in 2003.



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