Ford to establish new NEV joint venture with Chongqing Changan
Ford Motor Co. is set to establish a new energy vehicle (NEV( joint venture for passenger cars with state-owned Chongqing Changan Automobile, according to a Reuters article.
The Reuters article mentioned that a document from China’s market regulator revealed that,Ford, through its joint venture Changan Ford, will own a 60% stake in this new venture. Chongqing Changan Automobile will own the remaining 40%. Given that Changan Ford is an equal partnership between Ford and Changan Automobile, this means that Chongqing Changan will have a majority stake in their new NEV collaboration.
The joint venture will focus in supplying mainstream new energy vehicles and distributing Ford-branded models that Changan Ford has previously invested in. Additionally, the joint venture will sell existing Ford-branded gasoline-powered vehicles.
Earlier, Ford announced that it was integrating its subsidiary, Ford Electric Mach Technologies (FMeT), into its joint venture with Changan Automobile, Changan Ford. The move comes less than a year after FMeT’s establishment and is part of Ford’s strategic transformation and business realignment in China.
FMeT, initially responsible for the development and distribution of Ford’s electric cars in China, including the Mustang Mach-E, will no longer operate independently. Changan Ford will now oversee the sales of the Mustang Mach-E, expanding its sales network to nearly 300 dealers in 70 Chinese cities. This strategic shift is reportedly due to the Mustang Mach-E’s poor sales in China.
Recent data from the China Association of Automobile Manufacturers highlighted a 12.6% decline in Ford’s sales with Changan during the first half of the year compared to the previous year. The competitive landscape of China’s vast auto market has witnessed over 40 brands, including Tesla, reducing their prices since January, leading to significant industry-wide repercussions.