China Works blog: China manufacturing news, analysis and insights

Despite China’s auto exports having declined for 12 consecutive months since August 2008, the long-term Chinese car industry appears to be in rude health. Ford is the latest carmaker to announce a large new manufacturing investment in China. The US-based automaker has confirmed the construction of a fourth car plant in China – a USD490m facility in Chongqing – which will be used to build the next-generation Ford Focus car. Once completed, it is slated to produce 150,000 vehicles a year, raising Ford’s total Chinese output per year to 600,000. Ford’s announcement comes at the same time as China’s Ministry of Commerce approved a bid by General Motors to purchase a stake in Delphi Corp, a leading Chinese autoparts manufacturer.

 

Meanwhile, Chinese car manufacturers are also raising their investments at home and abroad. Last month, Geely Automobiles received an HKD2.59 billion investment from Goldman Sachs, raising the capital investment arm of Goldman Sachs’ stake in Geely to 17.8 per cent. The new funding will be used for “capital expenditure, working capital and potential acquisitions.” Geely has long coveted purchasing the Volvo car brand from its current owner, Ford.

 

Also in September, Chinese battery and electric carmaker BYD Co., announced that it plans to become China’s largest passenger car manufacturer by 2015 – and has set itself the ambitious target of ”fulfilling a dream of overtaking Toyota as the world’s No. 1 carmaker, through annual sales of over 10 million cars by 2025.”