Ford plans to rev up Chinese production

       Ford Motor Co said yesterday it planned to spend $490 million on building a third assembly plant in China, ramping up production to meet surging demand in this fast-growing market as the US automaker expands in Asia.
       The factory, to be built in the central Chinese city of Chongqing, will make the next-generation Focus compact car,which Ford plans to sell globally.
       The announcement from Chongqing came the day after the Dearborn,Michigan-based automaker unveiled a made-in-India compact car 'Figo'- part of a plan to boost sales in Asia, a region the US automaker has hardly dented but is counting on to drive growth.
       The four-door Figo, which is Italian slang for 'cool', will go on sale in India during the first quarter of next year.
       "Today's announcement reinforces our commitment to the further expansion of our China operations to meet the continued rise in demand from Chinese consumers for world-class Ford products and services," Ford chief executive Alan Mulally said in a statement.
       In India earlier this week, Mulally said he expected a third of global car sales to come from Asia in 20 years, a third from the Americas and a third from Europe and Russia.
       China is proving a lifesaver for all the big automakers, helping offset miseries elsewhere.
       Total sales in January-August surpassed those in the US for all but two months, rising to 8.33 million units, up nearly 30% from a year earlier, according to the China Association of Automobile Manufacturers.
       Sales should soar to 12.6 million units this year, up 35% from 2008, boosted by subsidies that the industry is lobbying Beijing to extend, Xu Changming, a senior economist with the Cabinet's State Information Centre, said at a seminar in Beijing yesterday.
       "The government is due to decide by mid-December," Xu said,"if it will continue the subsidies, which are aimed at promoting energy-efficient vehicles."
       "If the policy is extended to next year,rapid growth of auto sales will be sustained," Xu said."Otherwise, it will fluctuate, and it's hard to predict the degree."
       The Chongqing plant, part of Ford's joint venture Changan Ford Mazda Automobile Co, is the third for Ford in China and its second in Chongqing, an industrial hub of 30 million people sprawled along the upper reaches of the Yangtze River.
       Slated for full completion by 2012,Ford said the plant would be equipped to make other small cars on the company's global C-car platform in addition to the Focus.
       The Focus, scheduled to debut in January at the North American International Auto Show, represents a shift toward C-segment vehicles that Ford says it expects to account for nearly 28% of global sales by 2013.
       Ford lags behind other automakers in Asia, capturing only 2% of auto sales there, compared with nearly 15% in North America and 10% in Europe.
       Ford currently produces 450,000 vehicles in China annually."The new Chongqing facility will initially be able to manufacture 150,000 cars per year,with the capacity to produce 600,000 by 2012 when the plant is at full capacity,"the company said.
       Ford's current plant in Chongqing makes the Ford Focus, Ford Mondeo and Ford S-MAX. Its plant in Nanjing, in eastern China, makes the Ford Fiesta.
       Changan Ford Mazda Engine Co also has an engine manufacturing plant in Nanjing with an annual capacity of 350,000 units - one of the largest in China.
       Ford's other partner in China, Jiangling Motors Corp, makes commercial vehicles, including the popular Ford Transit van.
       Ford also says it plans to introduce four new vehicles in the Chinese market in the next three years.