According to sources close to the discussions, Ford Motor Co. is negotiating with partner Changan Automobile Group to build Lincoln models in China.

As part of the arrangement, Ford is giving consideration to establishing the southwestern city of Chongqing as a major manufacturing center that would serve the Chinese market and act as an export base for Asia. Domestic production is projected to begin by 2018 if sales of Lincoln models continue to perform well in China.

Manufacturing Lincolns in conjunction with its Chinese partner would allow Ford to avoid a 25 percent tax that is levied against imports, a savings that would make its luxury models more competitive against premium offerings from Audi, BMW and Mercedes-Benz. General Motors Co. and Nissan Motor Co. already produce Cadillac and Infiniti models in China.

The sources also indicated that ramping up Lincoln production in China would be relatively straightforward as Ford models are already produced domestically that share the same platforms and components.

Ford currently imports the Lincoln MKC, MKX and Navigator SUVs and the Lincoln MKZ sedan for sale in China. In 2015, sales of the four Lincoln models topped 11,000 vehicles.