With the auto industry in China continuing to grow, Ford (F) and its partners in a Chinese engine plant will invest an additional $37.3 million in order to boost capacity.
Ford’s partners in this venture include Mazda Motor Corp. and Chongqing Changan Automobile Co. Ford and Mazda each hold 25% of the venture, with Chongqing holding the remaining 50%.
Auto sales in China have been rising in recent years, as the nation’s population continues to migrate from the countryside into the country’s massive cities, but Ford's sales have been rising more than usual lately in response to a dispute between China and Japan.
The two nations’ are in a bitter dispute over control of the Senkaku Islands, leading to protests among Chinese against Japanese imports. This has been a big boost for all non-Japanese automakers, including Ford and General Motors (GM).
Toyota (TM) and Honda (HMC) have seen sales collapse. Toyota witnessed a 49% year-over-year drop in sales last month, following a 49% drop in September.
While Japanese automakers struggle, Ford has seen an impressive 48% year-over-year gain in the country. This is well above the new car sales increase rate of 5.3% for China as a whole.
We expect to see Ford continue to benefit from the dispute, as the slowdown of Japanese sales have persisted despite the fact that anti-Japanese protests have died down in China.
Michael Fowlkes is a financial writer who has been with the Fresh Brewed Media family since 2004. Over the course of his tenure with Fresh Brewed Media, he has worn many hats, including portfolio manager, options analyst, and writer. Michael received his undergraduate degree from Virginia Tech in Accounting and got his start in finance working as a stock trader for six years at Chase Investment Counsel in Charlottesville, Va. His articles typically cover big-picture events and forecasting what impact they will have on the stock market. In addition to writing for Fresh Brewed Media, Michael also wrote for AOL's BloggingStocks for three years, focusing most of his attention on the energy and technology sectors.