Ford in China (2): plans to enhance vehicle and engine production capacity

Ford to increase vehicle production capacity to 1.2 million units by 2015

2011/11/28

Summary


 Ford is building a new Chongqing plant which will start operation in 2012. In addition, Ford will build Jiangling Motors’(a company that it has a stake) new Xiaolan plant in Nanchang and a new passenger car plant in either Tianjin or Chongqing (potential sites). With these new plants, Ford will enhance its production of Ford brand vehicles. Ford will establish annual production capabilities on the scale of 600K units by the end of 2012 and double it up to 1.2 million units after 2015.

 Ford will also increase its engine production capacity by enhancing its Nanchang engine plant and building a new engine plant in Chongqing which is scheduled to start operation in 2013. Its annual production capacity is expected to reach a scale of 1.0 million units by the end of 2011, a little below 1.5 million units after 2013, and around 1.9 million units (including some of those for Mazda) in the long-term.
 In addition, Ford is building its first Chinese joint venture transmission factory in Chongqing.

 The following is on Ford's latest movements in connection with its production structure expansion of vehicles and engines in China.
 For Ford’s latest mid-term business plan, development and sales structures, and model plans, please see "Ford in China (1): mid-term business/model plans, and development/sales structures" that was issued in November 2011.

  RemarkOn November 21, 2011, Ford has announced the Powertrain Strategy of the Changan Ford Automobile, its Chinese joint venture company.   For details, please refer to related news article.



Ford’s business plan in China

Outlines
Production

・Ford will develop Changan Ford Automobile (a joint production base in Chongqing) which will be the major production base next to its Detroit base.
・Ford will raise Jiangling Motors (a joint production base in Nanchang) to the world's leading commercial vehicle base. The joint company will also strengthen the production of Ford brand passenger cars.
・Ford will establish a joint venture company with Changan Automobile Group in Taiyuan, Shanxi province, to enter into medium- and heavy-duty commercial vehicle business in China.

  ・Ford will invest 1.6 billion USD to build a total of four plants, three plants for finished vehicles, engines and transmission in Chongqing, and a finished vehicle plant in Nanchang. These plants will start running by 2013 (as of the end of September 2011, the construction of all plants have already started).
Sales ・From 2015 to 2020, Ford aims for an annual sales of 1.5 million units (including sales of imported products and export of China-made vehicles), and a market share of 8% (3% as of September 2011).
・Ford will expand sales in various parts of China (except large cities) by 2015.
  (The 2010 sales in markets of the western part of China were up by 59% over the previous year.)
・Ford will strengthen its tie with Changan Automobile Group in global business such as jointly developing overseas markets.
Model ・Based on the concepts of quality, green, energy saving, safety, and smart, Ford will strengthen its product lineups of China-made vehicles (in other words, penetrate into each segment more than before) to expand its share in the Chinese market.
・Ford will introduce a total of 15 new models over four years from 2012 to 2015 (of which about ten models will be produced at the Chongqing plant).
・Ford will enter into the Chinese high-end vehicle market with its Lincoln brand models (before local production, it will start the import and sales of these models soon).
・Ford will accelerate its launch of low-end model vehicles.
Environmental responsiveness:
・HV/PHV/EV models developed by Ford will be proactively introduced into the Chinese market.
・By 2020, Ford will improve emission gas levels of all its models, and reduce CO2 emission by 30% from the May 2010 level.
  ・Ford will expend its installation of high efficiency powertrains such as the combination of a new type direct-injection turbo engine (EcoBoost GTDi) and the PowerShift transmission (DCT).     *See the Note.
・Ford started test run of three environmental responsive models (Transit Connect [EV], Escape PHV, and Fusion HV) in several cities of China in April 2011.
・Ford plans to produce electric passenger cars (HV ,PHV, and EV) at the Changan Ford Automobile. The production will be expanded to a certain scale by 2020.

Source: Press release of Ford Motor (China), other various media reports
 Note: Some reports say that, in 2013, Ford will mount the EcoBoost GTDi engine on nearly 80-90% of all models globally sold, including China.





Vehicle production capabilities to exceed 660K units in Chongqing by 2015 and...

Table 1, Ford: Actual production volume and production capacity of joint venture plants in China

Joint venture company/plant Model Actual production volume
(unit)
Annual production Capacity
(1,000 unit)
2010 January
-August
2010
January
-August
2011
As of October
2011
After expansion
(planned year)
Nanjing plant
Ford brand car
74,388
48,206
44,161
n.a.
n.a.
Changan
Ford Mazda
Automobile
(under reorganization)
(Note 1)
Chongqing main plant
(two lines)
227,000
144,334
167,360
267
No expansion plan
Volvo brand car
(Note 2)
17,004
11,282
10,923
Chongqing new plant
Ford brand car
-
-
-
-
150 (2012) →
300 (by 2014) →
400 (by 2015)
Other new plant
Ford brand car
 (It is said that the construction is under review by Ford. The potential sites are Tianjin and Chongqing.)
-
n.a.
(Medium- and long-term plan)
Total
318,392
203,822
222,444
over 267
Over 417 (2012)
→ Over 567 (2014)
→ Over 667 (by 2015)
Jiangling Motors Nanchang
existing plant
Ford brand light vehicle
(Transit only)
53,639
33,619
37,883
64
220 (as of the end of 2011) →
260 (by June 2013)
JMC brand light truck, SUV, pickup
129,315
78,801
89,200
136
Nanchang
Xiaolan new plant
Ford, JMC brand vehicle
 (Construction started in July 2010, and operation will start by 2013. Light vehicles are planned to be produced at the new plant.)
-
154 (by 2013) →
200 (2014) →
300 (2015 or later)
Total
182,954
112,420
127,083
200
220 (as of the end of 2011) →
414 (as of the end of 2013) →
460 (2014) →
560 (2015 or later)
Grand total
501,346
316,242
349,527
Over 467
Over 637 (as of the end of 2012) →
over 1,027 (2014) →
over 1,227 (2015 or later)
 Source: Interview by MarkLines, Ford Motor (China)’s press release (April 18/19, 2011), Jiangling Motors’ press release(January 9, 2009, September 17, 2010, January 6/September 3 2011), XinKuaiBao (September 21, 2011), various media reports
Note 1. Excepting Mazda brand.
 Note 2. The consignment production agreements for the Volvo S40 and S80L (long-bodied S80) between Changan Ford-Mazda and Volvo Car will expire in 2016 and 2018, respectively.


New plant in Chongqing to start operation in 2012

 The new plant of Changan Ford Mazda Automobile in Chongqing will start operation in 2012; the new Focus, Ford's global strategic vehicle, etc. will be produced. The annual production capacity of the new plant (in Pingchang Industrial Park Zone, Yuanyang Town, Bei Bu Xin Qu, Chongqing) will initially be 150K units, and will be gradually increased to 300K units by 2014 and 400K units by 2015.

 Thereby, Ford's total annual production capacity of passenger cars in Chongqing (including the existing Chongqing main plant) will be 667K units by 2015.
 Ford will invest 490 million USD in total. The plant site area is 1.33 million square meters and includes facilities for press, body welding, painting, and assembling. It plans to introduce the flexibility production system, and energy saving and eco-friendly technologies in the new plant.

Source: Ford Motor (China)’s press release (September 25, 2009), Beijing Times’news release (September 15, 2011), and various media reports

Note: Some news reports say that Changan Ford Mazda Automobile will transfer its existing lines for the Fiesta and others in its Nanjing plant to Chongqing in 2012.


Ford considering Tianjin or Chongqing (potential sites) for new plant

 While keeping in mind that the Nanjing plant will be separated through the reorganization of Changan Ford Mazda Automobile (see the note below), Ford is considering to build a new passenger car plant to achieve an annual sales target of 1.5 million units between 2015 and 2020, according to the reports. Tianjin and Chongqing are potential sites for the new plant.

Source: Pacific Auto Online’s news release (February 21, 2011), The Economic Observer news release (February 21, 2011), and various media reports

Note: The draft project agreed among Ford, Mazda, and Changan Automobile Group in 2009 for reorganizing Changan Ford Mazda Automobile Co., Ltd., a joint venture of these three companies, was basically approved by the Chinese government (National Development and Reform Commission) in August 2011. The reorganization is expected to be officially approved by the end of 2011 and completed in 2012, if all goes well. The current capital structure of the joint venture is composed of 35% by Ford, 15% by Mazda, and 50% by Chongqing Changan Automobile owned by Changan Automobile Group.

 According to the reorganization plan, the Chongqing plant of Changan Ford Mazda Automobile will become Changan Ford Automobile Co., Ltd. which Ford and Chongqing Changan Automobile will own on a fifty-fifty basis; and the Nanjing plant will become Changan Mazda Automobile Co., Ltd. which Mazda and Chongqing Changan Automobile will own on a fifty-fifty basis.


Existing Nanchang plant: annual production capacity to be increased to 260K units by June 2013

 Ford will invest a total of 599.7 million yuan (RMB) in Jiangling Motors (in which Ford has a 30% stake) to expand the annual production capabilities (200K units as of October 2011) of its current finished vehicle plant in Nanchang City.
 First, Ford will expand the annual production capacity to 220K units by the end of 2011. Next, it will enhance the capacities of its press/painting facilities and accessory parts plant to increase their capacities to 260K units by June 2013.

Source: Interview by MarkLines, Jiangling Motors’ annual report/press release (April 10/September 17, 2010), and various media reports

New Nanchang Xiaolan plant to start operation in 2013

 Jiangling Motors built a new passenger car/light commercial vehicle plant in the Xiaolan Industrial Park (current Xiaolan Economic & Technological Development Zone) in the suburb of Nanchang City in July 2010. The new plant will start operation and production in the first half of 2013.
 The new plant will be located in the Xiaolan Industrial Park, approximately 14 km south from the main Nanchang plant. The site area is 1.2532 million square meters, and Ford will invest 2.133 billion yuan (RMB). Applying energy saving and eco technologies, Ford will build press, welding, painting, and assembling facilities, a logistics center, etc.
 SUVs, light vans, and light commercial vehicles (including pickups and light trucks) under the Ford or JMC brand will be produced at the new plant. The plant will start with an initial annual production capacity of 154K units in two shifts. It will be raised to 200K in two shifts in 2014 and to 300K units in the final phase.

Source: Jiangling Motors’annual report (2010, the first half of 2011)/press release (July 1/September 17, 2010), China Business News (July 24, 2010), etc.


Ford surmised to establish heavy commercial vehicle joint venture plant with Changan Automobile in Taiyuan

 It is surmised that Ford will establish a new commercial vehicle joint venture company, Taiyuan Changan Ford Heavy Truck Co., Ltd. (tentative name), with Changan Automobile Group on a 50-50 basis in Taiyuan City, Shanxi Province based on Taiyuan Changan Heavy Truck Co., Ltd. (wholly-owned by Changan Automobile Group). The joint venture company will produce Ford brand heavy commercial vehicles such as the Ford Cargo, and LNG or CNG-fueled medium and heavy commercial vehicles.
 Changan Automobile Group, which affiliated Taiyuan Changan Heavy Truck in 2007, is the largest state-owned commercial vehicle manufacturer in Shanxi Province. It produces heavy trucks such as dump trucks, trailers, and adapted vehicles.
 Also, Ford signed the strategic tie-up contract with Changan Automobile Group in Taiyuan City, Shanxi Province on September 30, 2011. Ford unveiled its plan to increase its investment in Shanxi Province.

Source: Shanxi Times (October 1, 2011), 21st Century Business Herald’s news release (May 25, 2011), Nanfang Daily (May 30, 2011), etc.




Powertrain production capabilities: Ford to start building new engine plant and first local...

Table 2, Ford: Actual production volume and production capacity of joint engine plants in China (including Mazda brand cars)

Joint venture plant Location Model Actual production volume
(unit)
Production capacity
(1,000 unit)
2010 January
-August
2010
January
-August
2011
2011
After expansion
(planned year)
Changan Ford Mazda (existing engine plant) Chongqing 2.0/2.5L model for Mondeo, 1.8L and so on for Focus
 (Ford’s model only)
221,183
133,135
129,133
350
(April)
No expansion plan
Changan Ford Mazda (new engine plant) EcoBoost GTDi series (2.0L, etc.), center direct-injection turbo type (1.0/1.5L)
(Ford’s model only)
-
-
-
-
400 (2013 or later)
→ 800 (long-term plan)
Changan Ford Mazda Automobile Engine
(reorganization)
Nanjing Mazda BZ series 1.3/1.5L,
Mazda I4 series 1.6/2.0L,
Ford Sigma series
  (Note)
213,052
139,881
116,759
350
(April)
430 (by the end of 2011)
Jiangling Motors Engine Factory (Jiangling Motors’ engine plant) Nanchang   Isuzu’s 4JB1 series (diesel engine of JX493 and so on)
187,981
117,539
134,523
187
(July)
No expansion plan
Ford’s Puma series
(diesel engine of JX4D24 and so on)
53
with 3-shift
(July)
All the below with three shifts
100 (by June 2012)
→ 120 (2012 or later)
total
187,981
117,539
134,523
240
287 (by June 2012)
→ 307 (2012 or later)
Grand total
622,216
390,555
380,415
940
(July)
1,020 (as of the end of 2011)
→ 1,487 (2013 or later)
→ 1,887 (long-term plan)
Source: Interview by MarkLines, Ford Motor (China)’s press release (April 19, 2011), Jiangxi Daily (July 6, 2010), and various media reports
Note: Mazda I4 series engine is an in-line four (In-line 4). The upgraded model of the Ford Sigma series is called Duratec.

 

Ford to enhance engine production capabilities

Ford to establish annual production capabilities of 750K units in Chongqing after 2013

 Changan Ford Mazda Automobile started building a new engine plant in Bei Bu Xin Qu, Chongqing City (Pingchang Industrial Park Zone, Yuanyang Town) in June 2010. It plans to start operation by May 2013. The new plant site area is 400K square meters, and Ford will invest 500 million USD.
 Changan Ford Mazda Automobile plans to establish an annual production capacity of 400K units at the new engine plant. With the production capacity of its existing Chongqing engine plant (350K units), Ford's annual production capacity of passenger car engines in Chongqing will be expanded to a total of 750K units after 2013.
 Ford's eco-engines, such as the EcoBoost GTDi series turbo engines (displacement of 2.0 L, etc.) and small center direct-injection type engines (that of 1.0 or 1.5 L) , and cylinder blocks, cylinder heads, crankshafts, etc. will be mainly produced at the new plant.

Source: Ford Motor (China)’s press release (September 25, 2010/June 16, 2011), The Economic Observer Online’s  news release (September 28, 2010), etc.

 

Nanjing engine joint venture plant to increase production to 430K units by the end of 2011

 In June 2010, Changan Ford Mazda Automobile Engine (Nanjing City, Jiangsu Province), a joint venture engine plant in Nanjing that was established by Ford, Mazda, and Changan Automobile Group, and the local government of Nanjing City agreed to expand the plant. It plans to increase its annual production capacity from the current 350K units to 430K units by the end of 2011.
 The site area of the Nanjing engine plant is 290K square meters, and has facilities for casting, machining, and assembling. According to the source, in addition to the current production of the Mazda BZ/I4 series engines, the production of the Ford Sigma series engines started at the plant in 2011. Also, cylinder blocks, cylinder heads, camshafts, crankshafts, and connecting rods are produced at the plant.
 Also, some news reports say that the Nanjing engine plant operation is being reorganized along with the reorganization of Changan Ford Mazda Automobile.

Source: Ford Motor (China)’s press release, China Automotive News’ news release (September 19, 2011), Nanfang Daily (June 4, 2010), and various media reports

Nanchang engine plant to expand annual production to 300K-unit scale after 2012

 Jiangling Motors’ own engine plant, Jiangxi Jiangling Engine Factory, is in the second-phase construction; production line for the Ford Puma series engine is being built. It will invest a total of 315 million yuan (RMB) to increase its current annual production capacity of 53K units in three shifts to 100K in three shifts in the latter half of 2012. It will further expand its production to 120K units in the future.

 Accordingly, the annual production capacity of the Nanchang engine plant will be expanded from 240K units, as of July 2011, to 307K units after 2012 which includes the Isuzu 4JB1 series engines.
 The site area of the plant is 8,596 square meters, and Jiangling Motors is producing the Ford Puma series engines (Puma I4 2.4 L and I4 2.2 L), cylinder blocks, cylinder heads, crankshafts, and connecting rods at the plant. Jiangling Motors also plans to introduce the 3.2 L version of the Puma I5 in the future.
 The Puma series engine is mainly mounted on the Ford brand light van, Transit, and on the JMC brand new SUV, Yusheng, and its next-generation pick up.

Source: Jiangling Motors’ annual report (2010, and the first half of 2011)/press release (April 1, 2010)

Ford to have transmission production capabilities

Changan Ford Mazda Automobile: to build its first transmission plant in Chongqing to have annual production capabilities of 400K units

 Changan Ford Mazda Automobile started building its first transmission plant in Bei Qu Xin Qu, Chongqing City in September 2011. At the earliest, the new plant is scheduled to start production in the fourth quarter of 2013.
 Changan Ford Mazda Automobile will invest a total of 350 million USD to build the new plant which will start with an initial annual production capacity of 400K units. Mainly, low-fuel consumption type, 6-speed DCT transmission (PowerShift) for Changan Ford Mazda Automobile’s Chongqing plant will be produced.

Source: Ford Motor (China)’s press release (May 19, 2011), and various media reports

 


(Reference)

Table 3, Ford: Chinese joint company’s production volume of passenger cars and commercial vehicles by model

(unit)
Joint venture company Model 2007 2008 2009 2010 January
-August
2010
January
-August
2011
Changan Ford Mazda Automobile
Total of Ford brand
179,947
155,892
233,310
301,388
192,540
211,521
 
Mondeo Zhisheng 2.0
26,252
0
1,431
1,115
712
22,985
Mondeo Zhisheng 2.3
18,573
38,040
42,669
49,725
32,479
16,282
Mondeo Zhisheng 2.5
3,248
-
-
-
-
-
Focus 2box 1.8
126,650
50,179
62,243
83,942
50,949
66,557
Focus 2box 2.0
5,844
4,577
4,018
3,289
1,080
Focus 3box 1.8
56,466
68,021
82,412
52,013
57,184
Focus 3box 2.0
1,303
919
688
469
322
S-MAX
5,224
3,726
4,400
5,100
4,423
2,950
Fiesta 2box 1.3
-
99
4,198
1,826
1,320
783
Fiesta 2box 1.5
-
235
30,273
49,964
31,716
29,779
Fiesta 3box 1.3
-
-
-
4,651
3,118
3,593
Fiesta 3box 1.5
-
-
14,579
17,947
12,052
10,006
Total of Volvo brand
6,307
5,452
14,976
17,004
11,282
10,923
Total of Mazda brand
40,087
39,748
71,944
88,950
53,383
51,611
Total
226,341
201,092
320,230
407,342
257,205
274,055
Jiangling Motors  
Ford brand’s light van
(Transit of the third or the fifth generation)
26,568
27,001
34,152
53,639
33,619
37,883
JMC brand’s light truck
39,161
37,736
48,620
67,627
41,778
44,481
JMC brand’s SUV and pickup
29,556
29,603
35,183
61,688
37,023
44,719
Total
95,285
94,340
117,955
182,954
112,420
127,083
Grand total
321,626
295,432
438,185
590,296
369,625
401,138
  Ford brand’s vehicle
206,515
182,893
267,462
355,027
226,159
249,404
  Passenger car
179,947
155,892
233,310
301,388
192,540
211,521
Commercial vehicle
(Transit only)
26,568
27,001
34,152
53,639
33,619
37,883
JMC brand’s vehicle
68,717
67,339
83,803
129,315
78,801
89,200

Note: The consignment production agreements for the Volvo S40 and S80L (long-bodied S80) between Changan Ford-Mazda and Volvo Car will expire in 2016 and 2018, respectively.

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