Ford weighs third China plant to meet demand

By Kevin Krolicki

BEIJING (Reuters) - Ford Motor Co (F.N: Quote, Profile, Research, Stock Buzz) may build a third assembly plant in China to meet fast-growing demand for its cars just five years into its push into the booming Chinese market, a senior executive said.

"We're exploring opportunities to add to our capacity," John Parker, executive vice president in charge of Ford's operations in Asia, said late on Friday ahead of the Beijing auto show.

Ford has an assembly plant in Nanjing, about 300 kilometers from Shanghai, in partnership with its affiliate Mazda Motor Co (7261.T: Quote, Profile, Research, Stock Buzz) and China's Chongqing Changan Automobile Co (000625.SZ: Quote, Profile, Research, Stock Buzz).

That $510 million plant, which began operations last year, has an initial capacity to produce 160,000 vehicles per year that could be expanded so it can produce up to 300,000, Parker said. Through its joint venture Changan Ford Mazda, the No. 2 U.S. automaker also operates a nearby engine plant.

In addition, Changan Ford Mazda has an assembly plant in the southwestern city of Chongqing. That facility is running near capacity at about 270,000 vehicles per year, Parker said, making the area a clear candidate for new investment.

"It's still up for discussion but Chongqing is a likely destination," Parker told reporters. "We're currently capacity constrained in Chongqing, so it's important to get Nanjing on stream this year."

Ford, which lost $2.7 billion last year, is banking in part on growth in markets like China to offset losses in the United States as it aims to return to profitability in 2009.

Ford sells the European-designed Mondeo sedan and the smaller Focus sedan in China. Later this year, Ford will add its new small car, the Fiesta.