With the rising sales of Changan Ford Mondeo and the growing popularity of Carnival, Changan Ford is expected to achieve a profit of nearly 2 billion yuan this year, which will significantly benefit Changan Automobile, holding 50% of its shares. The official launch of the Nanjing plant is anticipated to bring long-term advantages to the company. After the formal signing of the Nanjing Plant agreement on July 22, Changan Automobile (000625) saw its stock surge by as much as 2% the following day, reflecting strong investor confidence. Even Jiangling Motors (000550), which has no direct connection with Changan Ford, jumped 6.62% due to positive market sentiment, showing how closely linked the auto sector is in China.
Analysts believe that with the success of Mondeo and the improved performance of Carnival, Changan Ford is well-positioned to hit its profit target of 2 billion yuan this year. The Nanjing plant, once fully operational, will further enhance Changan Automobile’s long-term growth prospects. While the plant currently holds a minority stake, it represents a major milestone for both Changan and Ford. The equity structure of Changan Ford remains balanced, with Ford Motor Company through its subsidiary holding 50%, and Changan Automobile also owning 50%.
Historically, Ford had planned to partner with SAIC for a Shanghai-based project, but due to various obstacles, it eventually joined forces with Changan Automobile. This led to the creation of Changan Ford, initially investing $98 million in a technical reform project in Chongqing. Over time, the company expanded and now faces new challenges related to production capacity. To address this, Ford recently announced a massive investment of over one billion U.S. dollars in China, with the Nanjing plant being a key part of this strategy.
The Nanjing plant marks a significant step in Ford's development in China. With an initial investment exceeding 600 million U.S. dollars, the facility is expected to produce more than 20 vehicle models. Mazda and Ford are jointly involved in the project, with models like Mazda 3 and Ford Focus set to be produced there. Despite some secrecy around specific model plans, reports suggest that these vehicles will be manufactured in both Chongqing and Nanjing.
Changan Ford’s CEO, Zou Wenchao, emphasized that the Nanjing plant is entirely owned by Changan Ford and that all operations will be conducted under the company’s name. The expansion of the Chongqing plant is also underway, with the second phase of the paint shop and assembly line construction progressing rapidly. By the end of the year, production capacity is expected to increase from 50,000 to over 150,000 units annually.
Changan Ford has quickly become a major player in the domestic auto market, driven by the strong performance of Carnival and Mondeo. With monthly sales of over 1,500 units for Carnival and a rapid rise in Mondeo sales, the company is on track to meet its annual target of 65,000 units. Analysts predict that Changan Ford’s profitability will continue to grow, with profits expected to exceed 2 billion yuan this year. As a result, Changan Automobile is likely to see substantial returns, helping it recover from recent market downturns.
Looking ahead, the Nanjing plant is seen as a key driver of future growth for Changan Ford. As one analyst noted, “Chongqing represents the present, while Nanjing symbolizes the future.†With the involvement of Mazda and continued expansion, Changan Automobile is poised for a strong comeback in the competitive Chinese auto market.
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