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Asia:Ford may build luxury vehicles in China

By Detroit News staff reports, Bloomberg News and wire services

TOKYO -- Ford Motor Co.'s Premier Automotive Group unit, which sells Volvo, Aston Martin, Range Rover and Jaguar vehicles, may make luxury cars in China to tap demand from the country's growing population of wealthy customers.

"We cannot ignore a billion people. China offers huge potential for each of the luxury brands we have," Mark Fields, head of Ford's Premier Automotive group, said in an interview.

Ford, which said luxury brands may contribute a third of its profit by 2005, is following General Motors Corp. and other automakers in trying to boost luxury car sales in the world's third-biggest vehicle market. Auto sales in China may rise by a third this year, the government said.

A decade of economic growth at an average 8 percent per year has created a generation of wealthy businesspeople in China and easier financing is encouraging more people to buy cars. China has 210,000 millionaires in U.S. dollar terms, according to Cap Gemini Ernst & Young's 2003 World Wealth Report.

Bayerische Motoren Werke AG started making 325i cars in northeastern China last month. General Motors will begin making Cadillacs in Shanghai next year. DaimlerChrysler AG's Mercedes Benz unit plans to make C-Class and E-Class cars in Beijing. Volkswagen AG's Audi unit, which competes with Ford's Volvo cars, makes A4 and A6 models in China and already has 40 percent of the market.

"If we did local assembly, it would offer us the opportunity to more competitively price our products versus the competition," Fields said. "Any pursuit of local manufacturing would be done in concert with the larger Ford enterprise, utilizing their existing assets."

Even as incomes in the top bracket climb, wages for most Chinese are among the lowest in the world. The hourly pay for a Chinese manufacturing worker is 61 cents, rather than the $16.14 paid in the U.S., according to a study by economists at the Federal Reserve Bank of Dallas.

Ford, which last month said it will spend $1.5 billion to expand production in China, makes Fiesta and Mondeo passenger cars in Chongqing city in the country's southwestern Sichuan province.

It may begin its luxury car production with Volvo cars and Range Rover's Land Rover sport-utility vehicles, Fields said. The company now sells imported Volvo and Land Rover models in China and will shift to local assembly once sales numbers are high enough, Fields said. Ford also makes Aston Martins.

"Our new plant in Changan is state-of-the-art, the kind of plant you expect to find anywhere that Ford operates," said Ford Chairman William Clay Ford Jr. at an interview in Beijing last month. "The plant can be used to make our premium products if needed."

My first car was a 67 Mustang Coupe, 2nd one was a 67 Cougar XR-7, 3rd one was a 66 Mustang Coupe. Why did I get rid of these cars for ? I know why, because I'm stupid, stupid, stupid.

My next Ford.....
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