NANJING, September 27, 2005 -- Changan Ford Mazda Engine Co., Ltd. (CFME), a joint venture among Changan Automotive Group, Ford Motor Company and Mazda Motor Corporation, held its groundbreaking ceremony today in Jiangning Economic and Technological Development Zone (JNDZ) in Nanjing, China.

Changan Ford Mazda Engine Co. Ltd.(Artist's rendering of completed facility)
Changan Ford Mazda Engine Co. Ltd.(Artist's rendering of completed facility)

In May, the National Development and Reform Commission (NDRC) granted approval for the three-party joint venture engine company. The project recently received approval from the Ministry of Commerce.

Scheduled to formally launch its mass production in early 2007, the new engine company is a joint investment of Changan Automotive Group, Ford Motor Company and Mazda Motor Corporation, with a total investment amount of over 3 billion RMB. The three parties' equity share in the new engine company accounts for 50, 25 and 25 percent of the total, respectively. Yin Jiaxu, chairman and president of Changan Automotive Group, is chairman of the new engine company. Mei Wei Cheng, chairman and CEO of Ford Motor (China) Ltd., and Satoshi Tachikake, president of Mazda Motor (Shanghai) Business Management & Consulting Co., Ltd., are both appointed vice chairman, respectively.

"Thanks to the great support from the central and local governments, we've smoothly gone through the government approval procedures and have now started the construction of our new engine manufacturing facilities. We believe that the new engine company will not only produce world-class engines to support the three parties' rapidly growing vehicle manufacturing business in China, but also contribute to the local economic prosperity," said Motohide Tatsukawa,president of CFME, at the groundbreaking ceremony today.

As one of the largest engine manufacturing facilities in China, CFME will have some 1,800 employees and an initial annual capacity of 350,000 units, which can be quickly expanded as needed. It will supply advanced engine products primarily to the assembly plants of Changan Ford Automobile Co., Ltd. in Chongqing and Nanjing (under construction) as well as the three parties' other vehicle assembly operations in China.

"The establishment of the new engine company is one milestone in the cooperative relationship between Changan, Ford and Mazda," said Yin Jiaxu, chairman and president of Changan Automotive Group. "Changan Automotive Group has been ambitiously expanding its business operations towards the goal of becoming one of the top Chinese automotive players. The new engine company will serve as one of the major driving forces to realize this goal."

Also jointly operated by Changan Automotive Group, Ford Motor Company and Mazda Motor Corporation, Changan Ford Nanjing Company is a vehicle manufacturing plant currently under construction close to CFME. The assembly plant will have an initial annual capacity of 160,000 units, and can be quickly expanded to 200,000 units to meet growing market demand. It will produce both Ford and Mazda brand vehicles.

"Ford Motor Company, together with its business partners Mazda and Changan, is committed to contributing to the development of China's automotive industry by constantly introducing its newest technology and products to China," said Mei Wei Cheng, chairman and CEO of Ford Motor (China) Ltd.. "The establishment of this new engine company will significantly speed up our localization steps and sharpen our competitive edge in China."

The new engine company will manufacture two families of engines. One has been developed jointly by Ford and Mazda and the other has been developed by Mazda. Both engines adopt state-of-the-art technologies, with a good combination of high performance, outstanding fuel efficiency and low emissions. They are among the top level engines currently utilized worldwide.
The two families of engines will also be able to deliver performance exceeding all the major standards and requirements set by the Chinese authorities concerned. "With the three companies' collaboration on the engine company along with the vehicle plant, the cooperative relationship among the three companies will be strengthened, and this will create management efficiencies," said Kiyoshi Ozaki, director and senior managing executive officer at Mazda in charge of its China business operations. "The technology that is required to produce these engines has been carefully cultivated at Mazda's Japan facilities through a proven manufacturing system. We want to integrate this production technology into the Nanjing plant to realize a world-class engine plant."

The engines to be produced by CFME feature the latest technology such as VCT, VVT, which are environmentally friendly and among the top-level engine products in China today. CFME will be one of the most advanced engine production bases in the country and is expected to contribute to the further development of China's automotive industry.

The new engine company, to be mainly comprised of casting, machining and assembly facilities, will adopt the following advanced production and engineering systems:
  1. A superior quality and high-efficiency production line;
  2. A flexible and synchronized production line;
  3. An environment and employee-friendly production line.

The management team of CFME, which is to be approved by the Board of Directors of CFME soon, consists of experienced executives coming from the three partner companies.
Motohide Tatsukawa, president of CFME, will be assigned by Mazda. He has had over 25 years of working experience with Mazda, holding various management positions mainly in production planning and engineering. He has deep knowledge and experience in manufacturing. Before joining CFME, he was the general manager of the Production Planning Dept. at Mazda.

Luo Minggang, executive vice president of CFME, will be assigned to CFME by the Changan Automotive Group. He will be responsible for purchasing, supplier technical/quality assurance, localization as well as supplier logistics. With over 20 years of working experience with the Changan Automotive Group, Luo is a seasoned manager in R&D, process and manufacturing.

Fann Shin, vice president of business at CFME, came from the Ford Motor Company, holding responsibility for business planning, finance, IT and sales. Fann has had extensive working experience at Ford Lio Ho (in Taiwan), Ford Europe, Mazda Europe and Changan Ford.

Takeshi Araki, is vice president of Manufacturing Operations and holds responsibility for manufacturing engineering, casting, machining, assembly, quality and production control. Previously, he was general manager of the China Powertrain Plant Launch Office in the China Business Division at Mazda, and has extensive experience in engine production.

Chen Yuangang, vice president of administration, came from the Changan Automotive Group, responsible for administrative affairs, human resources, public relations and governmental affairs. Previously, Chen was director of Customers Service Department of Chongqing Changan Automobile Co., Ltd., and has had extensive experience in production, human resources and customer service.