Ford Expands in China to Meet Demand

Ford Motor Co.’s history of doing business in China dates back to 1913, when the first Model T was imported and sold in Shanghai. Yet, until recently, few Chinese knew much about the brand.

But that is changing. Today, Ford’s presence is much greater in the rapidly developing country with a population of approximately 1.3 billion.

Ford’s current market share in China stands at about 1.5%, the auto maker says. However, the company has plans to greatly increase that number through Changan Ford Mazda Automobile Co. Ltd., a joint venture that recently celebrated its fifth anniversary.

Mei Wei Cheng is overseeing Ford’s growth in China.

Ford says it plans to double sales in the country from like-2005, and it appears to be on track. First-quarter sales of Ford-brand vehicles hit 33,511 units, a 121% jump from like-2005 levels, making it one of the fastest-growing auto makers in China.

Output at Ford’s primary Chinese assembly plant – the Changan Ford Mazda Chongqing facility in southwestern China – has increased tenfold from its original annual output of 20,000 units in 2003 to today’s 200,000-unit annual capacity.

“As the major driving force of Ford Motor Co.’s China operations, Changan Ford Mazda’s achievements reflect Ford’s remarkable business growth in China,” Mei Wei Cheng, chairman and CEO of Ford Motor China Ltd., says.

“Our goal is to become, together with our partners, one of the top-three auto makers in the Chinese market.”

Ford will boost its production even more with the construction of a manufacturing plant in Nanjing. Once completed in 2007, the new facility will have an initial capacity of 160,000 units annually, bringing the auto maker’s capacity in China to 360,000 vehicles per year.

The company also is building an engine production facility next to the new Nanjing plant that will be capable of producing 350,000 engines annually.

Changan Ford Mazda already builds the Mazda3 at both the Chongqing and Nanjing operations and plans to add the Volvo S40.

To facilitate this growth, Ford is adding an average of one new dealership per week in China and says it expects to have 200 dealers in its network by the end of 2006.

The dealers will be backed by Ford Automotive Finance (China) Ltd., a Ford Credit subsidiary that began conducting business in China in July 2005.

Ford also produces commercial vehicles, including the Ford Transit, through Jiangling Motors Corp. Ltd., of which it holds a 30% share.

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