Ford Motor Company's China Operations Increase By 250,000 Cars Annually As $760M Assembly Plant Opens To Make Edge Crossover

In an effort to catch up with rivals General Motors and Volkswagen Group, Ford Motor Company said Tuesday its $760 million assembly plant is open for business in Hangzhou, China, 110 miles down the coast from Shanghai. The plant, built under Ford’s joint venture with Changan Automobile Group, is now producing the Edge crossover for the domestic market as part of Ford’s rapid expansion plans in the world’s largest automotive market.

Similar to its rivals, Ford Motor is eyeing the country’s rapidly growing middle class and appetite for foreign-brand sport utility vehicles. The Edge, which was completely redesigned for the 2015 model year, is the first of 15 new Chinese-manufactured vehicles that Ford plans to introduce in China by the end of next year.

Ford says sales through its Chinese joint ventures are up 14.6 percent in the first two months of the year, to 191,983 vehicles. New-vehicle sales in China are expected to slow this year as the economy cools into its “new normal” of slower industrial growth.

China new-car deliveries are up 8.7 percent, to 3.43 million units, compared with the first two months of 2014, according to the China Association of Automobile Manufacturers. But last year, January-February sales were up 11 percent compared with the start of 2013.

The 2015 Edge, with a sticker price starting below $30,000 in the U.S., has new features that are just now appearing in cars targeting middle-class Chinese buyers, including a 180-degree front camera, an upgraded automatic parallel parking assistance system and adaptive steering, which reduces the amount a driver has to turn a steering wheel at slow speeds. The Edge was Ford’s third best-selling SUV in the U.S. in February, after the Escape and the Explorer.

The new Chinese plant expands Ford’s annual production capacity by 250,000 vehicles, to 1.4 million, and has been built to accommodate simultaneous production of six Ford models. The facility “will help us accelerate the delivery of high-quality, innovative products to our customers in China," Mark Fields, Ford president and CEO, said in a statement on Tuesday. Groundbreaking for the plant took place in early 2012.

Through its local joint ventures, Ford now has five factories that make vehicles and two plants that make engines and transmission systems. Factoring in the new capacity, Ford is now the fourth-largest automaker in China in terms of production capability, surpassing Hyundai Motors. Nissan Motor remains in third place while Volkswagen Group (which includes Audi) and General Motors remain the largest foreign players in the market. Last year, Volkswagen reclaimed its top position against GM for the first time since 2005.