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Ford Set to Double Mexican Production

New plant could handle planned “Prius-fighter.”

by on Feb.08, 2016

Ford CEO Mark Fields is trying to find ways to reduce production costs of small cars and upcoming battery-electric models.

Ford Motor Co. will more than double production in Mexico, according to several reports, by both adding a new plant and increasing production in the Latin American nation.

The maker reportedly expects to put the focus on hybrids and smaller cars that are hard to economically justify building in the U.S. market. That includes the Ford Focus and C-Max models currently being produced at a suburban Detroit plant. But could also include a planned “Prius-fighter” meant to take on the popular Toyota hybrid.

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Ford had earlier indicated plans to shift production of the Focus and C-Max but declined to comment on the latest reports about Mexico.

But if those reports prove accurate, the Detroit maker will set up an all-new plant in the state of San Luis Potosi, in North-Central Mexico. That would allow it to tap into a network of existing automotive suppliers, including some serving the large Nissan manufacturing operations in nearby Aguas Calientes.

(Ford making big cuts to push Europe back into the black. Click Here for details.)

Ford also would expand production capacity at its current plant near Mexico City. That would help it boost capacity in the country by 500,000 vehicles annually. Ford’s current production capacity there is 433,000 vehicles – about 14% of its total North American production.

Ford plans to move Focus production to Mexico.

Along with moving the Focus and C-Max models, Ford is expected to use the new capacity to produce some of the new battery-based models it plans to add to its line-up as part of a $4.5 billion electrification program announced in December.

(Click Here for more on Ford’s battery-car plans.)

At the time, CEO Mark Fields said that, “More than 40% of our nameplates will be electrified” by the end of the decade, up from 13% today.

Among other things, Ford is looking to add a new model specifically aimed at the Toyota Prius, the world’s best-selling hybrid-electric vehicle.

Ford’s growing plans for Mexico have already generated a bit of controversy, outspoken Republican presidential candidate Donald Trump making the subject an early topic in his campaign. Trump warned that he would take steps to prevent the move if elected.

But Ford is by no means the only maker shifting production to Mexico or adding to existing capacity south of the border. The country has become one of the world’s largest automotive producers, rivaling such industry powerhouses as the U.S., China, Japan, Germany and South Korea.

Volkswagen and Nissan are among the manufacturers who have expanded facilities in Mexico in recent years and Nissan is setting up another line in Aguas Calientes as part of a joint venture with Mercedes-Benz. Kia and Audi are among the makers set to open their first plants in Mexico.

General Motors, meanwhile, will invest $5 billion to double its own Mexican production capacity by 2018.

The country has several advantages drawing in manufacturers like Ford, Nissan and Audi. Not only are its wages significantly lower than in the U.S., but Mexico has negotiated more free trade deals than any other country but Israel. That makes it easy and cheaper to ship cars built there to markets around the world.

(Ford plans to run four new GT race cars at the 24 Hours of Le Mans. Click Here for more.)

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2 Responses to “Ford Set to Double Mexican Production”

  1. GT101 says:

    Every single product produced by Ford in Mexico could be produced by U.S. labor and Ford would reap excellent products and competitive costs. When all you care about is more millions in CEO annual compensation, then you export U.S. jobs to pay for it. Financial greed by executive management, not labor, will eventually kill the U.S. auto industry.

  2. John Daloni says:

    Move jobs to Mexico? Fine. Just make sure your executives and their families move too.