Ford to Expand Chinese Engine Plant

Cars and Drivers

Published: November 21, 2012 8:56 am

Ford Motor Co. (NYSE: F) and its partners in a Chinese engine plant will invest an additional $37.3 million to expand the plant’s capacity. Mazda Motor Corp. and Chongqing Changan Automobile Co. are Ford’s partners in the venture. Ford and Mazda hold 25% each, and Chongqing holds 50%.

The plant makes engines for Ford models sold in China, including the latest model of Ford’s Focus subcompact. Ford’s sales have grown in recent months, as have those of General Motors Co. (NYSE: GM), Hyundai and BMW, due to the continuing dispute between China and Japan over the Senkaku Islands (or Diaoyu to the Chinese) in the East China Sea. The disagreement has sparked popular protests in China against the Japanese, and Japanese automakers Toyota Motor Corp. (NYSE: TM) and Honda Motor Co. Ltd. (NYSE: HMC) have seen Chinese sales collapse as a result.

Ford sales in China have risen 48% year-to-date compared with last year, far above the new car sales rate of about 5.3% in China as a whole.

The engine plant recently added shifts to the workday to meet demand for the Ford Focus and for some Mazda models.

Paul Ausick

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