Car Industry

Ford allegedly considering building Lincolns in China

Trumpisms about China aside, this could have some significant benefits as the company continues to grow in The Middle Kingdom.

Lincoln

The current Lincoln Navigator is stickered almost twice as high in China, thanks to high taxes on imported cars.

Wayne Cunningham/Roadshow

There's no stopping China's thirst for cars. As money continues into the hands of many that haven't necessarily had an abundance of expendable income before, its car market is attracting attention from all corners of the globe, all of which hope to strike it big. But there are some unique factors at play in the Chinese market, as evidenced by Lincoln's alleged desire to set up shop inside the country.

Sources told Bloomberg that Lincoln, Ford Motor Company's luxury arm, is looking to establish manufacturing roots in China with the help of Changan Automobile Group. For those unfamiliar with the process, an automaker can manufacture its vehicles inside China, so long as they're in a 50-50 joint venture with a domestic Chinese partner.

The original goal, per the New York Times, was to help Chinese brands understand the industry so that they could one day produce vehicle exports of their own. Automakers can sell imported vehicles in China, but they face a 25 percent import tax for doing so. Bloomberg points out that, as it stands, the price of a Chinese Lincoln Navigator is more than double what its US MSRP is.

Thus, the decision to partner up and manufacture in China seems like a no-brainer. Ford doesn't need to move its whole operation over there, nor would it, because exporting to the US would drive up costs in a different market. It's all about leveraging what you can, where you can, to keep costs low and bring as many heads through the door as possible.

"Lincoln is selling imported vehicles in China, and currently has no announcement about localized production," Lincoln said in an emailed statement. Ford already produces cars in China with Changan's help, so it wouldn't be beyond the realm of rational thought to assume that Lincoln would join in on the fun.

Update, June 8: Added manufacturer comment.

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