Ford is in talks with Chinese partner Chongqing Changan Automobile to export China-made Ford vehicles to emerging markets, two people familiar with the matter told the Reuters news agency on Thursday (20 January), though the automaker denied having any export plans.
Ford, and US rival General Motors are expanding their activities in China, now the world’s largest vehicle market and other fast expanding markets such as India.
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“Ford and Changan are exploring ways to expand their partnership. Export of China-made models is only one of the possible options,” one source with direct knowledge of the situation told Reuters.
Another source said the on-going discussions are in line with Ford chief executive Alan Mulally’s call to broaden and deepen ties with the Chinese partner.
A spokesman for Ford, which makes Fiesta, Mondeo, Focus and C-Max models in a three-way JV factory with Changan and Mazda, plus a separate light commercial JV with Jiangling Motor, said the company has no plans to export from China.
“We are building high quality, fuel efficient, fun-to-drive vehicles in China, for China, and have no plans to export vehicles from China,” Trevor Hale, a China-based spokesman for Ford’s Asia Pacific and Africa operations, said in a statement. A Changan spokesman declined to comment.
Ford was a relative latecomer to China, where GM and Volkswagen built up a lead, but has been accelerating its expansion recently – building a green field car plant with Changan and Mazda – while its 30% owned Jiangling Motor is also adding a $300m new facility.
In 2010, Ford was the fastest growing foreign automaker in the country. It sold 582,467 vehicles, up 40% year on year, outperforming a 32% overall increase in China.
“China remains the main focus for foreign automakers. But export deals would serve as an additional income source at a time when the market is slowing down,” Boni Sa, an analyst with IHS Automotive, told Reuters.
The Chinese government launched a massive package of stimulus measures at the height of the global financial crisis in 2009, including tax incentives for small cars. The incentives were scaled back in 2010 and scrapped at the beginning of this year.
Beijing city government’s recent move to impose quotas on new car registrations and possibly similar moves by other big cities to tackle traffic gridlock will also the market.
Many industry insiders expect the market to grow 10-15% this year after jumping 33% and 53% in 2010 and 2009, respectively, but some have projected a decline this year of more than 10%, Reuters noted.
Other carmakers, such as PSA Peugeot Citroen, are also seeking to gain entry into emerging countries with brands made at their China ventures.
PSA Peugeot Citroen is preparing a logistics platform in Shanghai and will export selected Peugeot and Citroen cars made at its China plants, Gregoire Olivier, the French car maker’s Asia chief, told the news agency.
Ford today confirmed it was mulling US exports to China. The announcement was part of a package of trade deals revealed during the state visit of Chinese president Hu Jintao.
