| HANGZHOU, China
HANGZHOU, China Aug 29 Ford Motor Co and
its Chinese partner will begin building its first factory on
China's coast, where the U.S. automaker can easily access the
country's growing number of affluent buyers.
The $760 million factory is one of five Ford is building to
cement its place in the world's largest auto market. Ford is
also building a third assembly plant at its manufacturing hub in
the central Chinese city of Chongqing.
Building vehicles in Hangzhou - a city of more than 6
million people to the south of Shanghai - draws Ford closer to
China's wealthier population along the coast. It also provides
Ford with an accessible port so it can export vehicles in the
future, although Ford said it is now focused on building cars
for the Chinese market.
"Hangzhou is really critical because of the market that it
serves, and it diversifies our operations," Chief Executive Alan
Mulally said after a groundbreaking event in Hangzhou on
Wednesday. "The customer base here is fantastic."
Since 2006, Ford has poured nearly $5 billion into China
with the aim of doubling capacity, employees and dealers by
2015. The plant in Hangzhou will be able to build 250,000
vehicles when it opens in three years.
Ford is the latest in a long list of automakers vying to
launch or expand top-tier brands in China, where luxury car
sales are expected to surpass those in the United States within
8 years. It plans to bring its Lincoln brand to China by 2014.
At an event at a converted Buddhist temple in Beijing on
Tuesday, Ford executives said Lincoln could win over buyers
partly by drawing on its legacy of building iconic cars like the
Zephyr and Continental. But they also said China represented a
rare chance for Lincoln to reinvent itself and skirt past its
stale image, which has hurt sales in the United States.
"We have a chance to be different here," Ford's global
marketing chief Jim Farley said. "We see the opportunity in
China for the first time to launch Lincoln from scratch. China
could teach us things we could incorporate into the experience
side in North America."
By offering a premium car with Lincoln, Ford could be more
attractive to dealers, helping the company gain traction in the
Chinese market, Booz & Co consultant Bill Russo said.
LOW-COST APPEAL, TOO
The U.S. automaker is also launching 15 Ford brand models to
China by 2015. One of those will be a low-cost car to appeal to
buyers in China's fast-growing cities in the West. That model
will rival the Chevrolet Sail, a car developed by General Motors
and its Chinese partners that sells for less than
Earlier this week, Mulally and other top executives marked
another groundbreaking of the automaker's third assembly plant
in Chongqing, home to Ford's massive manufacturing hub.
The complex is close to China's rapidly developing inland
cities, where Ford is looking to win buyers with low-cost
Ford chose to build a factory along China's east coast after
deciding to break up its three-way tie-up with Japan's Mazda
Motor Corp and China's Changan Automobile Co Ltd.
China approved that restructuring, which carves up the joint
venture assets between Mazda and Ford, earlier this week and it
is now being reviewed by Chinese regulators. Mazda was not
involved in selecting a site for the factory.
"This was a Changan Ford decision and a Changan Ford
process," Joe Hinrichs, Ford's head of Asian and African
operations, told Reuters.