The 50-50 venture, named Chang'an Ford Automobile Corp. Ltd., is expected to roll its first model off the assembly line in two years.

W. Wayne Booker, a vice chairman with Ford, described the move as opening "a new era" for the company, emphasizing that Ford is committed to provide Chinese customers with "international quality products and services."

The manufacturing plant will have an annual production capacity of 50,000 units, Ford said.

On Monday, the central government gave its final nod to the project.

Though Ford and Chang'an didn't disclose which model the new plant would produce, industry officials said Ford is expected to introduce either its Ikon compact car or Focus sedan to the Chinese market.

"The new venture is more likely to introduce Ikon model, which is designed for developing countries," said Angela Gu, a senior associate with Automotive Resources Asia Ltd.

The Ikon compact, which is expected to sell at about 100,000 yuan (US$12,000), will be a potential competitor for Shanghai General Motors' Sail and Shanghai Volkswagen's Polo, both of which are scheduled to be launched this year.

"As the most profitable auto group in the world, Ford will impose tougher competition on its major competitors," Gu said.

In 1990s, Ford lost its bid to form a joint venture in Shanghai to GM. The Michigan-based company currently holds a 30 percent stake in commercial vehicle and light truck manufacturer Jiangling Motors Corp.

(Eastday.com 04/26/2001)