Ford to Build New Engine Plant in China

Ford Motor Co. plans to erect a new engine factory in southern China with Jiangling Motors Corp., its partner in a commercial vehicle joint venture.

The engine plant, to be located in Xiaolan in Guangdong province, will have annual capacity of 200,000 units. Ford offered no additional details about the facility.

The company also says the venture will produce two unidentified new global Ford models: and SUV and a commercial vehicle. It did not say where the vehicles would be made.

CEO Alan Mulally disclosed the plans late this week as Ford and Jiangling opened their new $300 million commercial vehicle plant in Nanchang. The factory adds 300,000 units of annual capacity to the venture's 245,000 units at its existing assembly facility in Xiaolan. Both plants build the Ford Transit light commercial van.

Mulally also presided on the same day at the opening of a $500 million engine factory in Chongqing, China, with its other Chinese partner, Chongqing Changan Automobiles Co.

The new facility makes 1.0-liter three-cylinder and 1.5-liter four-cylinder engines for cars. The plant's 400,000 units of initial annual capacity more than double the venture's total capacity to 750,000 engines.

Ford's Chinese factories currently produce vehicles only for the local market. But Mulally tells Bloomberg News that it is "just a matter of time" before the company will begin using the country as an export base.