HANGZHOU, China — Ford Motor Co. (NYSE: F) breaks ground today on its new state-of-the-art assembly plant in Hangzhou, which will double production capacity in China to 1.2 million passenger cars annually by 2015.
As part of its largest expansion in 50 years, Ford and its joint venture Changan Ford Mazda Automobile (CFMA) will invest $760 million in the new plant, bringing Ford’s total investment in China to approximately $4.9 billion U.S. since 2006.
“Here in Hangzhou, we are laying the foundation for the future of Ford globally,” said Alan Mulally, president and CEO, at the event. “At Ford, our goal is to offer fuel-efficient, high-quality vehicles from our global portfolio that customers in markets like China want and value. This state-of-the-art facility will help us reach the goal of increasing worldwide sales nearly 50 percent by mid-decade to 8 million vehicles per year.”
Joining Mulally for the groundbreaking ceremony are Joe Hinrichs, president, Ford Asia Pacific and Africa; and Dave Schoch, chairman and CEO, Ford Motor China.
The Hangzhou plant is part of Ford’s aggressive expansion in Asia Pacific and Africa, with nine new plants (seven under construction) planned.
The first vehicle will come off the line in Hangzhou in 2015. The new plant further diversifies Ford’s manufacturing footprint in China while giving the company better access to the large customer base in China’s affluent coastal areas.
“Today is another major milestone for Ford in China, and reinforces our commitment to aggressively grow the Ford brand in one of the most vibrant auto markets in the world,” said Schoch. “This new plant is an important part of our aggressive plan to bring 15 new vehicles and 20 new powertrains to China by 2015, giving customers here even more choice in Ford’s next generation of high-quality, fuel-efficient, fun-to-drive vehicles.”
The Hangzhou plant will further complement Ford’s existing manufacturing base in China. In February, CFMA opened its second assembly plant in Chongqing, which houses a fully integrated facility including stamping, body assembly, paint, trim and final assembly operations.
On Monday, the company broke ground on another new assembly plant in Chongqing, where a new engine plant as well as a transmission plant are also under construction, making Chongqing the largest manufacturing location for Ford outside southeast Michigan. The joint venture with CFMA also has an assembly and an engine plant in Nanjing, China.
As part of its global growth plan, Ford also is rolling out a single manufacturing operating system to drive improved efficiencies, increase capacity utilization and make the company an industry leader in lowest total cost production.
As Ford brings on new facilities, such as those under construction in China, it is expanding the use of common manufacturing processes and standard systems for tracking material, delivery, maintenance and environmental costs so that new and existing plants are aligned in how they operate. Ford is also making broader use of virtual tools that reduce the cost of new plants and improve the efficiencies of new model changeovers.