Ford and JMC to Enter Heavy Truck Business in China with Major
Acquisition
TAIYUAN, China –
As part of its continued aggressive expansion in Asia, Ford Motor
Company’s commercial vehicle investment in China will expand into the
heavy truck business through a major acquisition, giving it a strong
foothold in the world’s largest market for the segment.
Jiangling Motors
Corporation (JMC) will buy a 100-percent stake in Taiyuan Changan Heavy
Truck Company. The deal will be finalized upon approvals from relevant
Chinese government authorities.
“JMC’s acquisition
represents a great opportunity to continue to expand the breadth of our
business in China across vehicle segments,” said Dave Schoch, chairman
and CEO, Ford Motor China. “A strong heavy truck operation like Taiyuan
will complement Ford’s existing passenger car and light commercial
vehicle operations here in the world’s largest and fastest-growing
vehicle market.”
In addition to the
acquisition, to accelerate its growth in China, Ford will be introducing
15 new vehicles and 20 advanced powertrains to China by 2015. To support
this growth, Ford and its partners are building five new plants in
China, including a new USD300-million manufacturing facility in Nanchang
where JMC is based, with an annual capacity of 300,000 units. When the
facility comes online in 2013, it will produce both JMC and Ford-branded
vehicles. To date, Ford has invested a total of USD4.9 billion to grow
its presence in China, which will be a key engine driving Ford’s growth
globally within this decade and beyond.
“Being a major shareholder of JMC, Ford is
delighted to witness JMC’s rapid development and business expansion in
the commercial vehicle market,” said Schoch. “Ford has enormous
experience and world-class products and technologies, including in the
heavy truck business, which can be deployed to support JMC after the
acquisition.”
Schoch, who is also vice chairman of JMC,
was among government officials and executives at a signing ceremony
today in Taiyuan, the capital of Shanxi Province, to commemorate the
acquisition agreement.
As part of the agreement, JMC will pay
cash for the 80-percent stake currently held by China Changan Automobile
and the 20-percent holding of China South Industries Group Corporation.
Upon completion of the deal, Taiyuan Heavy Truck will become a
wholly-owned subsidiary of JMC.
Ford holds a 30-percent stake in JMC,
which currently manufactures light commercial vehicles and SUVs,
including the Ford Transit which it has been producing since 1995. JMC
sold more than 190,000 vehicles in 2011, bringing in revenue of 17.5
billion Yuan (approximately USD2.7 billion).
Shanxi Province provides a significant
launch pad for JMC’s foray into the heavy truck business where heavy
trucks are in strong demand thanks to the region’s wealth of raw
materials and energy resources such as iron, coal and electricity.
“With Ford’s support, Jiangling will
quickly introduce new products and improve Taiyuan’s existing products
in order to bolster the competiveness of Taiyuan Heavy Truck,” said
Schoch.
Demand for heavy duty trucks is expected
to continue to pick up steadily given China’s long-term economic growth
potential and strong investments in infrastructure by the Chinese
government. China is the world’s largest market for heavy trucks, with
nearly one million units sold last year – more than North America,
Europe and South America combined.
