A car displayed at the Geely booth at the Auto Parts Expo in Beijing, China, last Thursday. Chinese carmaker Geely Automobile said the day before that it will raise about US$334 million in a deal with an affiliate of Goldman Sachs, building up cash for a possible takeover of Ford Motor Co's Volvo Cars. - Contributed
NEW YORK (AP):
Ford Motor Co plans to build a new assembly plant in China while Toyota Motor Co will start selling an entry-level family car there, as the world's automakers pour more resources into the fast-growing Chinese car market amid weakness in their home countries.
Ford said on Friday it plans to spend $490 million on a third assembly plant in China. The factory will make the next-generation Focus compact car, which Ford plans to sell globally.
The announcement from the central Chinese city of Chongqing comes the day after the Dearborn, Michigan, automaker unveiled a made-in-India compact car - part of a plan to boost sales in Asia, a region the automaker has hardly dented but is counting on to drive growth.
Meanwhile, an executive at Japan's Toyota announced plans on Friday to introduce a cheap family car in China. Executive Vice-President Yukitoshi Funo gave no details of the new model, but he said Toyota is also hoping to increase its dealerships base in China.
big lifesaver
Toyota now has about 550 dealerships in China, including Lexus showrooms. By contrast, the automaker has about 1,400 dealerships in the US.
China is proving a lifesaver for all the world's big automakers, which are plowing investment into the country to help offset miseries elsewhere.
"China is one of the few markets worldwide which still keeps growing this year. It's obvious any automaker would like to set up plants here," said Zhang Xin, an analyst at Guotai Junan Securities, in Beijing.
Total auto sales in China so far this year surpassed those in the US for all but two months, rising 30 per cent to 8.33 million units, according to the China Association of Automobile Manufacturers.
In the same period, US sales plunged 28 per cent to 7.1 million units, according to Autodata Corp, a research firm.
US monthly sales got a temporary boost in August from the Cash for Clunkers programme, which subsidised consumers who traded in older cars and bought fuel-efficient ones. But industry analysts say sales have fallen sharply since then.
climbing sales
Sales in China are expected to continue climbing to 12.6 million units in 2009, up 35 per cent from last year, said Xu Changming, a senior economist with the Cabinet's State Information Center in Beijing. Those figures are expected to get a boost from subsidies that the Chinese auto industry is lobbying Beijing to extend.