This Tuesday, Ford Motor Company announced that part of the production of its Focus model will be moved to China, while the vehicles will eventually be imported to the United States. This move is part of the manufacturer’s long-term bet on oil prices, as well as stable U.S.-China trade relations, reports Reuters.
However, this announcement suggests that China could have a way bigger impact on future vehicle production for North America, as more and more companies could be tempted to opt for the Asian country instead of Mexico, as a low-cost manufacturing source.
Your small Fords will still be made in Mexico, for two more years
For will make the switch in mid-2019 and it already looks like a great deal, since it will save them up to $500 million, consisting in lower tolling costs. Also, they’re looking forward to exporting almost 80,000 vehicles to China in 2017, including models from other brands, like the new Lincoln Navigator, expected to go into producing starting with September, at the Kentucky base.
This can be considered the first major decision made by Ford’s new CEO, Jim Hacked, who replaced Mark Fields, back in May. Still, this doesn’t come as a surprise, since the talks about such a move started a few months ago, under the old leadership, according to Joe Hinrichs, president of global operations.
US buyers want bigger cars
Even more, this is definitely a strategy change for Ford, which is adapting to the current reducing demand for small cars in the United States, in favor of profitable SUVs and also trucks.
Regarding this, the manufacturer is planning to invest almost $1 billion in the Kentucky truck plan, where the new Lincoln, as well as the Ford Expedition will be built. Also, their plans include supplying production, using the Ohio plant, if the demand for such vehicles increases.
President Donald Trump, who back in January criticized the company for building small cars in Mexico, did not address this issue yet.