SAIC-GM-Wuling announced today that it would build a third manufacturing base in Chongqing Municipality in China to meet rising demand for its vehicles. The joint venture between GM China, SAIC and Wuling Motors will begin construction of its new facility early next year. The RMB 6.6 billion first phase is scheduled to open in 2015, and the site will eventually have an annual production capacity of 400,000 vehicles and engines. SGMW will discuss which models will be built closer to the start of production.
Chongqing of course is the original factory town of Ford China and now contains a sprawling manufacturing center with numerous plants. Changan Ford Mazda Automobile (CFMA) last August broke ground for a third assembly plant, Chongqing 3, in China. CFMA has also signed a letter of intent with the Municipality of Chongqing to explore expanding its research and engineering capability in Chongqing.
The $600 million expansion will make Chongqing the largest Ford production site in the world by far – a latter day Rouge for communist customers. Chongqing 3 includes a new assembly line, body and paint shop. The first vehicle is expected to come off the flexible assembly line in late 2014. CFMA already operates two assembly plants and an engine plant in Chongqing, with another engine plant and a transmission plant currently under construction.
Chongqing 3 will have the capacity to produce 250,000 vehicles annually. CFMA is also expanding the capacity of its “Chongqing 2” assembly plant by 100,000 vehicles, for a total capacity increase in Chongqing of 350,000 vehicles.
Ford Motor and its communist government dictated partners set a sales record during October in China as the firms sold 60,518 cars and light trucks. Market leader General Motors sold more than 250,000 vehicles during the same period in the world’s largest car market
The SGMW joint venture currently operates manufacturing bases in Liuzhou, Guangxi Zhuang Autonomous Region, and Qingdao, Shandong. The production base in Chongqing will give SGMW a strategic position in southern, northern and Midwestern China. It will enable SGMW to reach its production target of 2 million vehicles per year by the end of 2015.
SGMW has been China’s leading mini-commercial vehicle producer since 2006. In 2009, it became the first vehicle manufacturer in China to sell 1 million vehicles in a calendar year. SGMW had year-to-date sales of 1,311,489 units in the domestic market with a 47.5% of China’s commercial mini-commercial vehicle segment. It is on track to top last year’s record domestic sales of 1,285,820 vehicles.
Chongqing Municipality, formerly part of Sichuan province, is one of China’s largest cities and an industrial center in Midwestern China. It has well-established infrastructure, a favorable investment environment and a developed automotive components industry, thanks to Ford Motor.