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Changan Automotive, Ford, Mazda Sign Joint Venture Contract for New Engine Plant in Nanjing

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NANJING, China--Changan Automotive Group, Ford Motor Company, and Mazda Motor Corporation today announced that the three partners have signed a joint venture agreement for a new engine plant in the Jiangning Economic and Technological Development Zone (NJDZ) at Nanjing, in the Jiangsu Province of eastern China. The new engine plant, which is scheduled to be operational by early 2007, will supply engines to assembly facilities in China, including the one currently under construction in the NJDZ. The project is subject to government approvals.

This new engine project is named Changan Ford Mazda Engine Company Ltd. The engine company will be owned and operated by a joint venture to be established among Changan, Ford and Mazda.

“This growing Nanjing project is key to our expansion plans in China,” said Mark Schulz, Ford Motor Company executive vice president, and president Asia Pacific & Africa. “We are very pleased to sign the three-way agreement for a second production facility in Nanjing. With the new engine joint venture and the Changan Ford Nanjing Company vehicle assembly facility, we will be creating more quality jobs in Nanjing. At the same time we will expand Ford and Mazda products offered to Chinese consumers.”

On the occasion of signing of the engine plant joint venture agreement, Yin Jiaxu, chairman and president, Changan Automotive Group, indicated that "this is a critical step forward for the three-way partnership of Changan, Ford and Mazda as we work together to develop the manufacturing capability in Nanjing jointly, and to deliver more quality products to our customers around the country."

Hisakazu Imaki, Mazda president and chief executive officer, added, “It is our pleasure and pride that we will produce engines in China, utilizing Mazda’s most advanced manufacturing technologies together with Changan’s deep knowledge of China. Our partnerships in China continue to help Mazda gain momentum.”

In January 2005, the Chinese state government granted approval for the 190,000 square meter joint venture vehicle assembly plant in Nanjing. The assembly plant will have an initial annual capacity of 160,000 vehicles, and can be quickly expanded to meet market demand.

The new engine site is approximately one kilometer west of the Changan Ford vehicle assembly plant currently under construction. Groundbreaking and construction will start once the government approvals are granted. The engine facility will be built on a 290,000 square meter parcel of land and will have a capacity of 350,000 engines annually. The plant is designed with flexibility for future expansion and the longer term growth plans for all three companies.

Two new families of fuel-efficient engines will be built at the new plant. Both engines will adopt state-of-the-art technologies and will be among the top level of the engines utilized around the world, achieving high horsepower and good fuel efficiency at the same time. They will exceed all Chinese government regulations.

This engine plant in Nanjing is part of the $1 billion plus investment together with partners that Ford Motor Chairman and Chief Executive Officer Bill Ford announced during his visit to China in October 2003. This investment plan is also the basis of Ford and Changan's strategic partnership.