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Ford to Sell 200,000 Cars in China

Ford's sales will hit 200,000 vehicles this year on the Chinese mainland, up from 120,000 units last year.

The world's second-biggest auto maker also aims to become one of the top three vehicle producers in China within the next 5 to 10 years, Meiwei Cheng, chairman of Ford's China operations told China Daily.

He said that the firm is looking forward to long-term success in China, rather than short-term gain.

Ford currently lags far behind arch rivals, such as Volkswagen and General Motors (GM), in China because of its late entry into the world's fastest growing auto market.

"It's true that we were late to enter the China market and were slower in the past, but we don't expect a one-or-two-year miracle but a long-term success in China," he said.

Cheng's remark echoed the company's chairman, Bill Ford, who said that competition in the China auto market is " a marathon not a sprint" during a visit to China last October.

Ford was outmaneuvered by GM in 1997 in a sedan joint venture project in Shanghai. It formed a US$98-million joint venture with Chang'an Motor in 2001 in Southwest China's Chongqing.

But Ford was thought to underestimate the potential of the China car market because the joint venture was a tiny business compared with the huge facilities of other world auto giants, such as GM and Volkswagen.

Ford has a "phased investment approach" in China, instead of a "big bang," Cheng said.

"Our business sense in China is to seek profitable growth and customer satisfaction," he said.

Bill Ford announced last October that the company plans to invest up to US$1.5 billion to enhance its manufacturing capacity, introduce new models and expand sales networks in China in the years to come.

Chang'an Ford's annual productive capacity will be increased to 150,000 units from 20,000 units last year.

Details of the Chang'an Ford joint venture's planned second plant will be released within the week, according to a Ford China official.

"We will bring a lot of new products to China in the years to come in order to maximize our investment and increase our market share," Cheng said.

The joint venture launched a new 2.0-litre Mondeo sedan, retailing between 209,800 yuan (US$25,300) and 229,800 yuan (US$27,700) at the weekend.

"I believe the Mondeo will be very competitive in the market," he said.

The Mondeo will go head-to-head with the Accord of Japan's Honda and the Buick Regal of General Motors and the Volkswagen Passat, the three most popular models produced in China.

"Chang'an Ford enjoyed profitability last year, this is a very rare occurrence," he added.

Executives at the joint venture said it will produce more than 65,000 vehicles this year, including at least 40,000 Mondeos.

Its total sales only stood at less than 20,000 units last year.

The venture started to produce the Fiesta compact car at the end of 2002, and will launch a 2.5-litre Mondeo later this year.

"We are also looking at a number of options for co-operation between Ford and its affiliate brands, such as Mazda, Jaguar, Volvo and maybe Lincoln in the future (for production in China)," Cheng said.

Mazda's sedans are being produced in Northeast China's Jilin Province and on the southern Hainan Island in co-operation with First Automotive Works Corp, China's largest automaker.

China's auto market will be able to grow by 30 to 50 percent annually over the next three to five years, but the growth rate "will not be sustainable in the long term," Cheng said.

Total vehicle output in China surged year-on-year by 35 percent to 4.44 million units last year.

Volkswagen and GM, the top two foreign automakers in China, sold almost 700,000 cars and 386,710 vehicles in China last year.

(China Daily February 17, 2004)

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