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Changan Automotive, Ford, Mazda Gain Government Approval for Changan Ford Mazda Engine Company Project

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NANJING, China--Changan Automotive Group, Ford Motor Company and Mazda Motor Corporation today announced that National Development and Reform Commission (NDRC) has granted approval for a three-party joint venture engine company project in Jiangning Economic & Technological Development Zone (JNDZ) near Nanjing in Jiangsu Province. The approval marks another major step forward in the growing cooperation among Changan Automotive, Ford and Mazda in China.

Mark Schulz, executive vice president of Ford Motor Company and president of Ford Asia Pacific & Africa, said, "All of us deeply appreciate NDRC's timely approval. This new engine plant complements the new vehicle manufacturing facility and enables all three companies to provide the latest technology products to our growing lists of customers."

The three partners signed a contract to establish the new engine venture on April 19 in Nanjing, location of the future plant.

The new engine facility, named Changan Ford Mazda Engine Company Ltd., is designed with an annual capacity of 350,000 engines, and will be flexible for future expansion in line with the longer term growth plans for all three parties. Scheduled to be operational 2007, the new engine facility will primarily supply engines to the nearby Changan Ford Nanjing Company, the joint venture vehicle assembly plant currently under construction in JNDZ to be operated by Changan, Ford and Mazda. Additionally, the new engine facility will have the capacity and flexibility to supply engines, as needed, to the partners' other assembly operations in China which produce Ford and Mazda brand products.

"The new engine company project will further strengthen the three parties' cooperation and their respective competitiveness in China market as engine is the most sophisticated and key component in a car," said Mei-Wei Cheng, chairman and CEO, Ford Motor (China) Ltd. "And we're also glad that it is in line with the Chinese government's new industrial policy which encourages the local development and manufacturing of engine products."

Yin Jiaxu, chairman and president of Changan Automotive Group, said: "The timely approval for the new engine company project is encouraging as it signifies a further step forward in the three-way partnership of Changan, Ford and Mazda. By leveraging the combined strength of all three parties, Changan is well positioned in its move towards the goal of becoming one of the top auto manufacturing groups in China. "

"Mazda feels very pleased to contribute its most advanced manufacturing technologies to this three-party joint venture," said Hisakazu Imaki, president and CEO of Mazda Motor Corporation. "The new engine plant, together with the Changan Ford Nanjing Company vehicle assembly plant, provides an excellent platform for Mazda to manufacture more quality products for the growing China market."

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

With a building area of 92,000 square meter, the new engine manufacturing facility is approximately one kilometer west of the vehicle assembly plant. Groundbreaking and construction will start very soon upon receiving the government approval.

Two families of fuel-efficient engines will be built at the new engine company. Both will adopt state-of-the-art technologies from Mazda and Ford, 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 be able to deliver performance exceeding all related Chinese government requirements.

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