BEIJING -- Ford Motor Co. has received the final approval from the Chinese government to begin building a new manufacturing plant in the east China city of Nanjing.
The 2.1 million square-foot plant will produce Ford and Mazda brand cars. It will have an initial annual production capacity of 160,000 units with the capability of expanding to 200,000 units. The production volume for each brand has not been decided, Ford China spokesman Kenneth Hsu said.
The Nanjing plant is jointly funded by Ford, Ford affiliate Mazda, and Changan Automotive Group. The size of the investment has not been disclosed.
This will be Mazda's first direct investment in a China manufacturing plant.
Start of production likely won't be until some time in 2007, Hsu says, because the site still has to be prepared and it usually takes 24 months to build a new plant.
The new plant will use Mazda's production system, which is highly flexible even with low production volumes, Mazda spokesman Akira Shigemasa says.
That is an advantage in China, where tastes change quickly and the newest model to be introduced is usually a best seller, at least for a time.
"With this new plant we will be introducing more Ford and Mazda products to the Chinese consumer," said Mark Schulz, Ford Motor executive vice president, in a statement. "Just as important, we will be introducing an entire company to them and the way we do business and how we care about the community."
Ford plans to eventually introduce all its brands to China. The Land Rover, Jaguar and Volvo brands are already sold as imports in China. Ford sources say that the Lincoln Navigator luxury SUV will be launched as an import in China later this year.
Ford's investment in Nanjing is part of the $1 billion that Ford Motor CEO Bill Ford pledged to invest in China during a visit here in October 2003. Of that, Ford has invested more than $100 million in its plant with Changan Automotive in the southwest China city of Chongqing.
The Chongqing plant makes the Ford Fiesta subcompact and the Mondeo sedan. It also imports the Ford Maverick SUV, which is based on the Ford Escape made in the United States.
Ford makes the Transit commercial van at Jiangling Motor Corp, which is 30 percent owned by Ford.
In 2003, Ford sold close to 29,000 vehicles in China. That number should more than double for 2004, though the final sales figure is not yet available, says Hsu.
The Mazda 323 and Mazda6 sedans and the Premacy minivan are currently produced under licensing agreements with China's First Auto Works.
Mazda sold 97, 132 vehicles in China in 2004, up from 80,075 in 2003. Mazda aims to sell more than 100,000 units in China in 2005, says Shigemasa.