China: Ford joint venture buys $1.1 billion plant image

The second largest US automaker, Ford Motor Co, via its Chinese joint venture with Chongqing Changan Automobile Co have announced their decision to buyout and update a production facility northeast China.

According to a company spokesperson, the agreement has been valued at 6.6 billion yuan ($1.1 billion) and the newly acquired plant would be used to lift Changan Ford’s overall production output in China by 200,000 units per year. Ford, a rather late comer to the world’s largest auto market, rose spectacularly and is now challenging the top foreign brands in the country, but needs to expand its production capacity further to meet the growing demand for passenger vehicles. “We are looking for long-term growth opportunities,” commented the spokesperson. The new factory will also act as a strategic advantage, assisting with the company’s geographical coverage of China. The US carmaker currently operates plants in western China’s Chongqing region, as well as Hangzhou in the Yangtze River Delta on the eastern coast.

The plant will be taken over from Harbin Hafei Automobile Group Co, which is actually a subsidiary of Chongqing Changan’s parent firm. The upgraded facility will start building Changan Ford automobiles after the second half of 2016. According to the China Association of Automobile Manufacturers official figures, new car sales in China – the biggest single market on the globe – grew 6.9 percent in 2014 after double-digit gains in the previous years and are forecasted to increase another 7 percent in 2015.

Via Reuters