Ford is a relatively late-comer to China in terms of local vehicle production. It lags far behind Volkswagen and General Motors, who are the current market leaders in China.

The company runs a joint venture with Mazda and China's Chang'an Motor Corp in Chongqing Municipality in the southwest. Together, they are building a new plant in Nanjing, capital city of East China's Jiangsu Province, which is expected to be operational by 2007.

Cheng said Ford is investing US$20 million into the first phase of creating a new a research and engineering centre in Nanjing.

The centre will both work with Ford's joint ventures in China in product development and serve its multiple brands globally, he said.

He estimated Ford and its affiliated brands will sell a total of 300,000 vehicles in China this year, up from 220,000 units last year.

The venture in Chongqing is making Ford Fiesta, Focus and Mondeo, Mazda3 and Volvo S40. It will introduce a European S-MAX next year.

As the market leader in China for two decades, Volkswagon, together with its subsidiaries Audi, Skoda, Bentley and Lamborghini, is showcasing 42 new models in a 4,459-square-metre venue.

The group announced that it has upgraded the biennial Beijing auto exhibition to an "A Class" show, replacing Tokyo's.

The Beijing motor show will be on the same level with those in Geneva and Frankfurt for Volkswagen, it said.

"China has been one of Volkswagen Group's most important markets in the world. It is growing rapidly and still has huge potential in the future. Our endeavours in the Beijing auto show demonstrate our high hopes for the China car market," said Winfried Vahland, executive vice-president of the German carmaker.

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