Ford is planning to raise its 30% stake in Jiangling Motors, according to Reuters, citing a source with direct knowledge of the matter.
Joe Hinrichs, president of Ford Asia and Africa, who is also chairman and chief executive of the company’s China operations, is said to have expressed an interest to increase Ford’s stake in Jiangling when meeting with the governor of Jiangxi province earlier this week.
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A provincial government official in Jiangxi, home base of Jiangling confirmed the meeting took place. Ford China and Jiangling declined to comment on the report.
An increased stake in Jiangling, which now makes up nearly a third of Ford’s China sales, would give the US carmaker more voting power on Jiangling’s board and help it make further inroads in China’s fast-growing light commercial vehicle segment.
In the first 11 months of this year, Jiangling Motors’ sales jumped 59.5% to 164,088 units. The company has two plants with combined capacity of 210,000 units, making JMC and Ford’s Transit models.
In July, the partners broke ground for a new US$300m factory with capacity for up to 300,000 units annually. The facility is scheduled to start operation at the end of 2012.
Ford also has a three-way car venture in China with Chongqing Changan Automobile and Mazda.
Last month, Ford cut its stake in Mazda to 3.5% from 11% to allow it to increase flexibility as it continues to pursue growth in key emerging markets. Observers say the move is aimed at strengthening the company’s business in the heavily regulated Chinese market.
Ford has been accelerating its expansion in the country, building its third China car plant with Chongqing Changan and Mazda and adding 100 dealers, mostly in inland cities.
In the first 11 months, Ford and its partners sold 525,100 vehicles in China, up 39% from a year earlier, outperforming a 34.1% rise in the overall market.
