Ford Ramps Up China Auto Purchasing

Will increase by $1 billion this year.

Ford Motor Co., which just posted a $5.8 billion third quarter loss, said Oct. 26 it plans to ramp up auto parts sourcing in China by at least one billion dollars this year. "We will purchase over $2.6 billion worth of auto parts and systems to supply the production outside China for all our brands across the world," Ford chairman William Ford Jr. said in Beijing.

Speaking at a company-sponsored environmental event, Ford said the company's new engine and assembly plants in the eastern city of Nanjing would start production next year. The operations there are run by Ford's joint venture in China, Changan Ford Mazda Automobile Co. Ltd.

Ford Motor set up an auto parts procurement center in Shanghai in 2002, and has forecast an increase in purchases in China to $10 billion by 2010. Last year Ford sourced about $1.6 billion in mainland parts.

Ford is looking to cut $6 billion in annual costs to meet its Way Forward turnaround plan by 2010. Foreign automakers are purchasing more from China, currently the world's fourth largest vehicle market, to help reduce their costs as improving quality has made parts cheaper.

Despite the rise in sales, September was up 105.5% year-on-year, Ford is well behind the pace of established rivals General Motors and Volkswagen in the Chinese market. The company earlier this year completed its one billion dollar investment in China, which was mostly focused on a new plant in the eastern city of Nanjing.

Copyright Agence France-Presse, 2006

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