Chongqing Changan Automobile (SZSE:200625) (“Changan”) is one of the largest automakers in China. It owns a joint venture with Ford. The joint venture Changan Ford has contributed to the majority of the company’s profits and launched in 2013 two locally manufactured sports utility vehicles (SUV) models. The two models, Kuga and EcoSport, aim to participate in the fastest-growing passenger vehicle segment – SUVs – which saw sales growth of over 40% year-on-year in 2013. Ford is determined to ramp up production capacity to double their current production volume by 2015 and also expects to bring more new models to China. Despite the strong share price performance, we remain engaged as we believe the company is executing its aggressive expansion phase to gain market share.
From Value Partners (Trades, Portfolio)’ Classic Fund Second Quarter 2014 Commentary.
