Japanese carmaker Mazda will join forces with its parent firm Ford Motor in production in China by jointly building a new plant with the US auto giant's joint venture with Chang'an Motor Corp.

The new plant, to be located in Nanjing, capital city of east China's Jiangsu Province, will have an annual production capacity of 200,000 cars, Ford Chief Operating Officer Jim Padilla revealed this Thursday when the companies signed a land-use agreement with the local authorities.

The new plant is part of Ford's US$1.5-billion expansion plan in China which was announced last October in Beijing by company Chairman Bill Ford.

However, the companies have not revealed the size of the investment and specific role of Mazda - 33.4 percent owned by Ford - in the new plant.

Analysts said that, in order for tripartite cooperation between Mazda, Ford and Chang'an to keep in line with China's auto industry policy, the US giant will transfer part of its 50 percent stake in its joint venture with the Chinese firm to the Japanese carmaker.

Foreign automakers are permitted to have a maximum stake of 50 percent in their joint ventures with Chinese partners, according to the new policy.

Mazda will produce its M3 model at the new plant, according to industry sources.

The collaboration with Mazda is seen as a substantial step by Ford to swiftly expand in China using all of its brands.

Ford is lagging far behind rivals General Motors and Volkswagen in China's car market as a result of its late decision to produce locally.

"I ensure that Ford will focus on growing our business in China," Padilla said.

"Our multiple brands - Ford, Volvo, Jaguar and Land Rover - will also participate in China side by side, working with Chang'an Ford," he added.

The joint venture Chang'an Ford now has a plant in southwest China's Chongqing Municipality, which started production at the beginning of last year.

The venture sold 50,000 cars by the end of June this year, including 30,000 Fiesta compact sedans and 20,000 Mondeo mid-sized sedans.

Padilla said that the Chongqing plant's annual production capacity will also increase to 200,000 cars.

Mazda now has two technical licensing deals with First Automotive Works Corp (FAW), one of China's biggest automakers, which is producing the Japanese firm's M6 model in northeastern Jilin Province, and the Premacy and Familier on south China's Hainan Island.

Mazda reportedly plans to establish a car sales company with FAW to market its vehicles produced in China.

Ford also has a joint venture in east China's Jiangxi Province, making the Transit commercial wagon.

China remains the world's fastest-growing car market, although growth of vehicle sales in the nation is slowing down.

Total sales of China-made vehicles grew by 24.25 percent year-on-year to 2.55 million units during the first half of this year.

The growth was down from 34 percent last year, with that of passenger cars at 31.59 percent from 75 percent.

(China Daily July 23, 2004)