Posts Tagged ‘Chinese industrial policy’

Ford Will Build a Second Engine Plant in China

Chinese industrial policy prompts $500 million JV reinvestment.

by on Sep.27, 2010

Reinvesting in China is mandated by an industrial policy that in practice requires it .

Ford Motor Company and its government dictated partners are building new engine plant in China that is due to open in 2013. With the additional capacity of 400,000 units at the new facility, Ford’s joint venture, Changan Ford Mazda Automobile Ltd (CFMA), is more than doubling its existing engine capacity of 350,000, to 750,000 engines annually.

Ford Motor Company CFO Lewis Booth joined Chongqing Mayor Huang Qifan, Chongqing New North Zone Administrative Committee Director Xiong Xue, Chongqing Changan Automobile Company chairman Xu Liuping, as well as Ford China chairman and CEO Robert J. Graziano in Chongqing at an official signing ceremony over the weekend.

China is now by far the world’s largest auto market, and Chinese industrial policy in effect requires that all profits earned there are reinvested in the country and its local partners. The U.S. remains alone among industrialized nations – with elected or totalitarian governments – without any such job and investment protecting policy.

The $500 million (RMB 3.4 billion) investment will be funded entirely by CFMA and will be located in Chongqing’s so called New North Zone.


Dongfeng Honda Starts Production of New Spirior

Total Honda production capacity in China, the world's largest auto market, is now more than 600,000 vehicles.

by on Aug.19, 2009


The mid-size car is essentially the same as an European Accord or an American Acura TSX model.

Dongfeng Honda Automobile Co., Ltd. has expanded its capacity by 80,000 units annually with the start of production of the Spirior this week. The joint-venture of Honda in China held an “off-line” ceremony at its automobile production plant in Wuhan, Hubei Province. The Spirior is scheduled to go on sale next month in China.

The mid-size car is essentially the same as the European Accord or American Acura TSX with the V6 removed and a 2.4-liter i-VTEC four-cylinder engine substituted. (China has tougher fuel economy standards than the U.S. in an attempt to decrease oil imports.)

Spirior is positioned as a “premium sporty sedan, according to Dongfeng. The name, if my limited Chinese translation skills are close, appears to be a combination of “spirit” and “superior,” thereby confirming that automotive marketers continue to mangle whatever language they are working over.

Dongfeng Honda has been producing CR-V models since April 2004, and Civic models since 2006. The company’s sales are growing — 109,000 units for the first seven months of 2009, up 10.5% compared to the same period a year ago. The Chinese market is now the world’s largest. Chinese industrial policy requires all auto companies to form joint ventures with local auto companies so jobs are created and profits remain in the country.

To make way for the  Spirior, Dongfeng upped its annual production capacity in Wuhan from 120,000 units to 200,000 units. With this expansion, Honda’s total annual automobile production capacity in China is 610,000 units, including 360,000 units for Guangqi Honda and 50,000 units for Honda Automobile (China), which produces automobiles exclusively for export. About 4,000 jobs have been created.