Ford invests $760 million for construction of new facility in eastern China

Article by Christian Andrei, on April 19, 2012

Ford is spending $760 million to construct a new factory in eastern China, specifically in Hangzhou, Zhejiang province. This is in line with the automaker's efforts to become the largest vehicle manufacturer in the world and its goal to catch up to General Motors and Volkswagen. According to Ford, the new facility will aid in increasing Chinese output by 100% to 1.2 million vehicles each year when production commences in 2015.

The construction is set to start later in 2012. The disclosure of the investment comes two weeks after Ford revealed that it would shell out $600 million in order to construct a third facility at its Chongqing complex in southwest China and is in line with the company's fastest and largest expansion since the 1960s in Europe and North America.

Currently, Ford has disclosed or commenced construction of eight powertrain and assembly factories in Asia. Ford entered China relatively late compared to rivals VW and GM, which both have a substantial lead in the country. Ford has a three-way alliance with Japan's Mazda and China's Chongqing Changan Automobile. It manufactures Mondeo, Focus, Fiesta and other sedans in China.

In 2011, Ford achieved sales of 320,658 vehicles in China, compared with the 2.26-million annual tally of VW and the 2.55 million figure for GM. By the middle of the decade, Ford and its joint ventures are aiming to have seven assembly plants, one transmission facility and two engine factories in China. Joe Hinrichs, Ford's head of operations in Asia, stated that they are studying this "more than just this quarter or this calendar year." He added that they are mulling over as to how Ford set itself up for success in the Asia Pacific region over the next several decades.

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