Changan Auto Prepares Third Plant in Chongqing

Chinese automakers are continuously seeking for new ways to expand their local businesses, driven forward by overseas companies who are seeing China as one of the most important auto sectors nowadays. The best example comes from Changan Auto who revealed plans to build a third production facility in southwestern city of Chongqing. The factory will build small vehicles and will require an investment of up to 2.5 billion yuan ($366.2 million).

The main reason for building a new facility to handle small car production is that the two existing plants belonging to the Changan Ford Mazda Automobile venture are expected to reach full capacity in two to three years, chairman of the board at Chongqing Changan Automobile Co Xu Liuping was quoted as saying by gasgoo.com.

The new plant will have an estimated annual production goal of 300,000 units, with opening date currently set for 2012. It will help Changan reach an annual capacity of 2.1 million units, Xu added. This will make Changan one of the largest manufacturers in the country, the source added.

But even if Xu said the Chinese manufacturer made the first plans to build a third plant in China, Robert Graziano, president of Ford China, revealed the joint venture hasn't discussed such a plan and the decision must be first reviewed by the parent company based in the United States.

Changan Auto increased its July sales by 82 percent to 107,863 units compared to the same month of the previous. The company produced a total of 118,037 units in July, 64.9 percent year on year.