25 September 2002
Automakers make more inroads in China
Not to be outdone by the other major automakers jumping into the Chinese market, Nissan Motor Co. will spend $1 billion in a joint venture to make cars, trucks, and buses.
"China is Nissan's new frontier," said Nissan CEO Carlos Ghosn.
Nissan and its Chinese partner, Dongfeng Motor Group Corp., want to create a "globally competitive" company with annual sales of 550,000 vehicles by 2006.
The Japanese company said it plans to spend $163 million to $245 million on developing new products.
General Motors, Volkswagen, and Honda already make cars in China, and Toyota just unveiled a $1.2 billion venture last month with China's FAW Group Corp. The companies said they plan to produce 300,000 to 400,000 passenger cars a year by 2010.
Their deal, reached after 14 months of negotiations, still requires approval from Chinese regulators.
Car manufacturing will take place at Dongfeng's facilities at Xiangfan, in the central province of Hubei, and at Guangzhou, the capital of the southern province of Guangdong.
Meanwhile, Ford plans to buy more auto parts built in China as part of its effort to reduce the cost of building cars and trucks.
"As we expand our manufacturing facilities in China and attract suppliers, I anticipate sourcing in China to be in the high single-figure billions and can see it going into double figures" by mid-decade, said Ford president and chief operating officer Nick Scheele.
Ford is trying to trim its $90 billion annual purchasing bill on the way to slashing its product development costs by $700 a car over the next three of four years.
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