Despite the fact that China’s economic growth has slowed, General Motors and Ford Motor Co. continue pushing ahead with plans to expand their production footprint there.
Mark Fields, Ford’s chief executive officer, told analysts this week thatFord expects the Chinese economy to grow by 7% to 7.5%, which is ample enough to sustain an increase in sales of new vehicles. Ford expects sales to come in at between 24 million and 26 million units and the automaker, with its Chinese partner, is moving ahead with plans to open two new factories in China this year.
Ford plans to open both an assembly plant and an engine plant in China this year. Ford sales in China grew 19% in 2014 to 1.1 million units and helped maintain the profitability of Ford overall operations in the Asia Pacific region despite losses in other parts of the region.
GM, which has slipped behind Volkswagen in China, announced its principal partner in China, Shanghai GM, opened a new assembly plant in the Yangtze River metropolis of Wuhan.
Shanghai GM’s new manufacturing base in central China’s Hubei province represents an initial investment of $1 billion. The new Wuhan plant has an annual manufacturing capacity of 240,000 vehicles for sale across China by Shanghai GM.
The Wuhan Branch includes press, body, paint and general assembly shops as well as support facilities. It is leveraging GM-designed manufacturing processes and technology, 452 robots and an automation rate of 97% in its body shop. In line with Shanghai GM’s Drive to Green strategy, the plant has also adopted environmentally friendly technology.
Shanghai GM also announced the start of construction of the second phase of the Wuhan Branch. The second phase will represent an investment of an additional $1 billion. It will include press, body, paint and general assembly shops.