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Ford Motor Company Raises Stake In China's Jiangling Motors

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On: Thu, Dec 23, 2010 at 10:29AM | By: Sherry Christiansen

Ford Motor Company Raises Stake In China's Jiangling Motors

Ford plans to invest in a higher stake in China's Jiangling Motors, which now makes up over 30% of Ford's China sales. The investment will give Ford more voting power on Jiangling's board to enable future growth in China's fast-growing light commercial vehicle segment.

"Joe Hinrichs expressed an interest to increase Ford's stake in Jiangling when meeting with the governor of Jiangxi province earlier this week," according to a source that was interviewed by Reuters last week. Hinrich, president of Ford's Asia operations has also stepped in to take the position as chairman and chief executive of Ford's China operations in November.

Hinrichs met with Chinese governor Wu Xinxiong on December 13 in Jiangxi, the home base of Jiangling Motors. There is no official confirmation that a formal agreement has been reached yet, and Ford China declined to comment.

According to Ford data; last year Jiangling Motors’ sales rose over 59% to 164,088 units (up 39% from a year earlier). Production resulted from two separate plants, outperforming a 34.1 percent gain of the overall China market. The total capacity of the Jiangling Motors plant that builds Ford’s Transit models is 210,000 units.

A $300 million plant was opened in July; it can produce 300,000 units annually, and will begin operation in 2012.

An additional venture in China is being managed by Ford Motor Company, Chongquin Changan Automobile Company, and Mazda.

Ford reduced its stake in Mazda Corporation from 11% to 3.5% with the intention of “increasing flexibility" as the company continues to pursue growth in emerging foreign markets, such as China.

General Motors and Volkswagen were first to get involved in the Chinese market; Ford has been expanding gradually as it builds its 3rd Chinese auto plant and added 100 additional dealers as the industry continues to grow in China.

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