Report: Ford Building New Factory, Designing Small Car For China

Ford broke ground yesterday on a new car $760 million factory in China, which it hopes will help the  bolster its sales in the country. The American automaker also has another plan of attack for China: launch a small, cheap car there that is specifically designed for the Chinese market. The ground-breaking ceremony came after Ford's luxury arm Lincoln announced it would start selling cars in China by 2014. Collectively, Ford hopes adding the new assembly plant in Hangzhou, China, will increase its global sales by 50 percent, to eight million units annually in 2015. The first car is expected to roll off the Hangzhou production line in 2015. Earlier this week, Ford also broke ground on a new engine and transmission plant in Chongqing, China, where Ford already had a body, stamping, and assembly plant. The company says that will make Chongqing its largest manufacturing operation outside of Michigan. It's all part of Ford's strategy to grab as large a chunk as possible of the Chinese car market. "At Ford, our goal is to offer fuel-efficient, high-quality vehicles from our global portfolio that customers in markets like China want and value," Ford CEO Alan Mullaly said at the groundbreaking ceremony in China. Ford plans to sell several existing models in China, including the EcoSport, Kuga, Edge, and Explorer, but also will create and produce country-specific cars. There will reportedly be a small, low-cost vehicle that is $3000 to $4000 cheaper than an equivalent Ford Fiesta. The company already sells the tiny and cheap Figo (pictured below) hatchback in India, but that model won't be adapted to the Chinese market -- in part because it is too small and right-hand drive. According to the Detroit Free Press, Ford will instead engineer an all-new model for China that should cost the equivalent of about $10,000. The new model should launch in 2015, meaning it will likely be produced at the new plant in Hangzhou. Offering cheaper models like this and the EcoSport small crossover will help improve Ford's reputation in China. Consumers there reportedly see Ford cars as high-quality, but overly expensive. Sources: Ford, Detroit Free Press

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