Skyrocketing labor costs in coastal China and fewer restrictions on car ownership in western China are among the factors prompting automakers to invest in production facilities located in more central locations on the Mainland. Fiat, for example, plans to start production in Changsha, Hunan Province, next year, while Ford is expanding its plant in Chongqing, which will also boost extra capacity by 2012.
The Fiat-Guangzhou Auto Group joint venture in Changsha expects to manufacture 140,000 finished vehicles and 220,000 engines annually in the first phase, and 250,000 finished vehicles and 300,000 engines once an expansion is implemented. The new Changan Ford Mazda Automobile (CFMA) plant, meanwhile, initially will be capable of manufacturing 150,000 vehicles per year, increasing annual capacity at CFMA operations to 600,000 units by 2012. Local brands such as Chery are also increasingly looking west....