Ford Motor plans to spend $490 million on building a third assembly plant in China. The factory, to be built in Chongqing, will make the next-generation Focus compact car, which Ford plans to sell globally.
China is proving a lifesaver for all the big automakers, helping offset miseries elsewhere.
According to the China Association of Automobile Manufacturers, total sales in January-August surpassed those in the US for all but two months, rising to 8.33 million units, up nearly 30% from a year earlier.
The government is due to decide by mid-December if it will continue subsidies, which are aimed improving vehicle sales — at which they have been extremely effective — and at promoting energy-efficient vehicles.
Xu Changming, a senior economist with the Cabinet’s State Information Center, said, "If the policy is extended to next year, rapid growth of auto sales will be sustained. Otherwise, it will fluctuate, and it’s hard to predict the degree."
The Chongqing plant, part of Ford’s joint venture Changan Ford Mazda Automobile, is the third for Ford in China and its second in Chongqing, an industrial hub of 30 million people sprawled along the upper reaches of the Yangtze River.
The plant will be fully operation by 2012. Ford said the plant will be equipped to make other small cars on the company’s global C-car platform in addition to the Focus.
AP reported that Ford currently produces 450,000 vehicles in China annually. The new Chongqing facility will initially be able to manufacture 150,000 cars per year, with the capacity to produce 600,000 by 2012 when the plant is at full capacity.