This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
$1 buys you full access to ALL of TheStreet's Subscription Services! Learn More

Ford Opens New China Plant as Analyst Cites China Spending Rise

Stocks in this article: FGM

CHONGQING, CHINA ( TheStreet) -- Continuing its growth in China, Ford (F) opened a $500 million engine plant in Chongqing on Wednesday, a sign of its increasing presence -- and increasing spending -- in the world's largest automotive market.

Meanwhile, GM (GM) broke ground for a new $1.3 billion Cadillac plant in Shanghai's Jinqiao zone, hoping to increase the sale of luxury vehicles in China.

The Ford, a joint venture with Changan Ford Automotive, has an initial annual capacity of 400,000 engines. It will produce 1.0-liter three-cylinder EcoBoost and 1.5-liter four-cylinder engines. That more than doubles Changan Ford's annual production capacity of 350,000 units.

"The engines produced here and the process by which they are manufactured represent the latest in sustainable and green manufacturing processes," said CEO Alan Mulally, who is traveling in Asia this week, in a prepared statement. "The 1.5 and 1.0 liter engines produced will help power Ford's continued growth here in the world's largest automotive market."

Ford shares closed Tuesday at 15.65, up 10 cents. Year to date, the shares are up 18%. On Monday, Standard & Poor's Capital IQ analyst Efraim Levy lower his rating to "hold" from "buy," while raising his 12-month target by $2 to $17.

"While we see significant volume growth in China, income should be restrained by expansion-related costs in that and other emerging markets," Levy wrote. He said an increase in U.S. profits, fueled by rising demand for pickup trucks, will be offset by sizable European losses in 2013, although those losses should diminish in 2014.

The GM plant will have a capacity of 160,000 vehicles a year. GM is the market leader in China but trails other automakers including BMW in the luxury market.

"Rising incomes per capita are going up. China's a great market," said GM CEO Dan Akerson, The Associated Press reported. "We're going to bring our high-end premium product here and we're going to see how we run against the competitors from Europe and Japan."

The new Ford plant, located in Lijia in Chongqing's New Northern Zone, is the second of five plants Ford will open in China this decade, and the second of seven Ford will open in the Asia Pacific region. "This kind of expansion is nearly unprecedented," Mulally said.

Ford China sales rose 45% in May. In the first five months of the year, Ford China sales rose 48% to 332,467 units.

-- Written by Ted Reed in Charlotte, N.C.

>To contact the writer of this article, click here: Ted Reed

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,810.06 +91.06 0.51%
S&P 500 2,063.50 +10.75 0.52%
NASDAQ 4,712.97 +11.1030 0.24%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs