Ford Expands Chinese Joint-Venture Activities

Ford is set to increase its footprint in China with the establishment of a new joint venture with Changan Automobile.

Changan Ford and Changan Automobile will operate the as yet unnamed venture in what documents released by the Chinese automotive market regulator reveal will be concentrated on the “the supply of new energy passenger vehicles and the distribution of Ford brand models.”

The term “new energy passenger vehicles” refers to vehicles with electric, plug-in hybrid or range extender drivetrains.

Ford Changan says the aim of its joint venture is to help the company “better grasp the development trend of electrification and intelligence in the automotive industry.”

Although the venture’s main focus is electric vehicles, Ford says the new joint venture will include selling Ford models with internal combustion engines too.

Changan Ford will control a 60% stake in the new joint venture company, and Changan Automobile the remaining 40%, according to details contained in the Chinese government documents.

The move comes after Ford announced it was shifting the responsibility of the Mustang Mach-E in China to Changan Ford after a 12.6% drop in sales during the first half of 2023 compared to a year earlier.

Ford has reduced the price of the Chinese market Mustang Mach-E by a total of RMB68,000 ($9,400). At the height of a discounting push, it was available at prices starting at RMB209,900 ($29,000).

Additionally, the company created to sell the Mustang Mach-E, Ford Electric Mach Technologies (FMeT), in China plans to cease independent operation and operate under Changan Ford.

FMeT was established in 2022. Its primary responsibility was the distribution of the Chinese-built Mustang Mach-E.

Changan Ford, a 50/50 joint venture between Ford and Changan Automobile, was formed in 2012 after a restructuring of the earlier Changan Ford Mazda operations. With plants in the Chinese cities of Chongqing, Hangzhou and Harbin, it is the largest manufacturing operation outside of Ford's Dearborn, MI  headquarters in the U.S.

The agreement also comes amidst a flurry of rhetoric from Ford and Chinese automakers about how fast hometeam automakers in China are cracking export markets, such as Europe, and how China will control the BEV supply chain for the next decade or more. Ford chairman Bill Ford said last June that the U.S. was not ready to compete with China in the production of BEVs.

"They developed very quickly, and they developed them in large scale. And now they're exporting them," Ford told CNN's 'Fareed Zakaria GPS' Sunday program. "They're not here but they'll come here we think, at some point, we need to be ready, and we're getting ready," Ford said.

That said, Ford and other automakers are struggling to stay relevant long-term in China as the country's home-grown BEV auto producers are ahead of Western automakers after almost four decades of operating China-mandated joint ventures with U.S. and European auto companies.