A Ford/Mazda joint venture with the Chinese Changan Automotive has been given approval by the country’s National Development and Reform Commission (NDRC) for an engine manufacturing operation near Nanjing, Jiangsu Province.

Mark Schulz, a Ford executive vice president and president of Ford Asia Pacific & Africa, called the approval "timely". The three firms only signed a contract to establish the engine venture little more than a month ago.

Changan Ford Mazda Engine Company will have an annual capacity of 350,000 engines. It is due to begin production in 2007, supplying two families of engine to the nearby Changan Ford Nanjing joint venture assembly plant currently under construction (initial output capacity of 160,000 units).

It will also have the capacity to supply engines to the partners' other assembly operations in China.

"The new engine company project will further strengthen the three parties' cooperation and their respective competitiveness in the Chinese market as the engine is the most sophisticated and key component in a car," said Mei-Wei Cheng, chairman and chief executive of Ford in China. "And we're also glad that it is in line with the Chinese government's new industrial policy which encourages the local development and manufacturing of engine products."

Meanwhile DaimlerChrysler plans to start assembling Mercedes-Benz models in Russia this year.

A Kremlin statement quotes Daimler chief executive Juergen Schrempp as telling Russian President Vladimir Putin the cars would be assembled in St Petersburg starting in the autumn.

"If I had any doubts - and I don’t have them - regarding Russia’s development process, they would have definitely disappeared after this meeting,’’ Schrempp told Putin during talks in the Kremlin on Monday.

"Economists are predicting Russia will develop successfully."