Ford Motor Co.
) revealed that its light commercial vehicles joint venture,
Jiangling Motors Corp. (or JMC), opened a $300 million assembly
plant in Xiaolan, located in Guangdong Province, China. The plant
will manufacture both Ford branded and JMC-branded vehicles.
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The JMC Xiaolan plant will double Ford's existing annual
production capacity of 245,000 units in China by adding 300,000
vehicles. The joint venture also plans to construct an engine
plant with initial annual capacity of 200,000 units. Ford also
plans to introduce two new global products through Jiangling
Motors, which includes a commercial vehicle and a sports utility
In April this year, Ford Motor raised its stake in Jiangling
Motors to 31.5% from 30.0%. The Detroit-based automaker purchased
13.0 million Hong Kong dollar-denominated B-shares of Jiangling
Motors, which started manufacturing JMC light trucks, SUVs, and
Ford Transit van in China from 1997.
Currently, Ford is the fastest growing global automaker in China.
The automaker's sales soared 48% in the first five months of the
year, driven by strong demand for its EcoSport and Kuga SUVs. In
the same period, Jiangling Motors joint venture posted a 7.6%
rise in sales to 94,208 vehicles in the country.
Ford has embarked upon an aggressive expansion plan in China in
order to catch up with rivals such as
General Motors Co.
). The company plans to triple its lineup in China by introducing
15 models, including the Kuga small sport utility vehicle by
Currently, Ford Motor sells seven models in China. The company
also plans to introduce its Lincoln luxury lineup in the booming
luxury vehicles market of China in the second half of 2014.
In order to develop the new models, Ford will build new plants
raising its capital spending to about $6 billion annually by
mid-decade from $4.3 billion in 2011. In order to keep pace with
the expansion, Ford also plans to double its workforce by hiring
1,200 employees by 2015.
Ford anticipates global sales to expand by 50% to 8 million
vehicles by 2015 given the potential growth in Asia, mainly China
and India; and rising demand for small cars. The automaker
anticipates Asia-Pacific to account for 40% of its vehicle sales
in four to five years. The company also anticipates Asian sales
volumes to double and account for a third of its global sales by
Currently, shares of Ford retain a Zacks Rank #3 (Hold).
) are currently performing well in automotive industry. Both of
them carry a Zacks Rank #2 (Buy).