Ford to import U
Ford to import U.S. Concentrate from China instead of Mexico
Ford Motor Co. plans to import its next-generation Concentrate sedan from China, abandoning plans to build the petite car in Mexico.
Production will begin in the 2nd half of 2019, Ford said Tuesday. Most of the initial models for North America will come from China, with extra variants coming from Europe.
Ford already builds the Concentrate for the Chinese market at its Changan Ford Assembly Plant one and two in Chongqing, China.
Ford presently makes the Concentrate at its Michigan Assembly Plant in Wayne, Mich., but production is scheduled to end there in two thousand eighteen as the automaker makes room for the Bronco SUV and Ranger midsize pickup. Ford originally planned to stir Concentrate production to a fresh, $1.6 billion plant in San Luis Potosi, Mexico, but the company canceled those plans in January, less than a year after announcing them. Ford then planned to build the cars at its existing plant in Hermosillo.
Ford said at the time the budge would save $500 million, and it now says building the car in China will save an extra $500 million, for a total savings of $1 billion in production costs.
«We`ve done a lot of research and consumers care a lot more about the quality and the value than they do about the sourcing location,» Joe Hinrichs, Ford`s president of global operations, said in a conference call with some reporters Tuesday. «iPhones are produced in China, for example, and people don`t truly talk about it.»
General Motors last year became the very first U.S. automaker to import a vehicle from China with the launch of the Buick Envision. It also makes the Cadillac CT6 plug-in hybrid there. Volvo, which is wielded by China’s Geely Automobile Holdings, also builds some cars in China for the U.S. market.
Albeit it is cheaper to build and ship cars to the U.S. from Mexico than China, “this was not a variable cost decision,” Hinrichs said. “It permits us to free up a lot of capital” because Ford now has to retool only one plant — the Chongqing plant — rather than two to supply North America.
Given dwindling overall U.S. request for puny cars such as the Concentrate, “we thought this was the best balance of that cost/capital tradeoff,” Hinrichs said. Concentrate sales have fallen Nineteen.7 percent in the U.S. through the very first five months of the year to 67,146, according to the Automotive News Data Center.
Hinrichs said Ford planned to inform the White House this morning. There was no instantaneous comment from the White House.
Asked if Ford was worried about having to pay a border tax, as President Donald Trump has threatened on vehicle imports from Mexico, Hinrichs said “the capital saving outweighs the risk” of a potential tax on the Chinese-built Concentrate.
Ford also said Tuesday it will invest $900 million at its Kentucky Truck Plant for production of the fresh Expedition and Lincoln Navigator SUVs. The budge will preserve 1,000 jobs at the plant, Ford said.
The investment goes beyond Ford`s pledge to invest $600 million there through two thousand nineteen as part of its two thousand fifteen contract with the UAW. Ford in late two thousand fifteen invested $1.Three billion for production of its aluminum-bodied Super Duty, albeit that money was tied to its two thousand eleven UAW deal.
There was no comment from the UAW.
«Large SUVs are attracting a fresh generation around the world — and we`re finding fresh ways to produce the capability, versatility and technology that customers around the world truly want with our all-new Ford Expedition and Lincoln Navigator ,» Hinrichs said.
«At the same time, we also have looked at how we can be more successful in the puny car segment and produce even more choices for customers in a way that makes business sense.»
Reuters and Bloomberg contributed to this report.
Ford to import U
Ford to import U.S. Concentrate from China instead of Mexico
Ford Motor Co. plans to import its next-generation Concentrate sedan from China, abandoning plans to build the petite car in Mexico.
Production will begin in the 2nd half of 2019, Ford said Tuesday. Most of the initial models for North America will come from China, with extra variants coming from Europe.
Ford already builds the Concentrate for the Chinese market at its Changan Ford Assembly Plant one and two in Chongqing, China.
Ford presently makes the Concentrate at its Michigan Assembly Plant in Wayne, Mich., but production is scheduled to end there in two thousand eighteen as the automaker makes room for the Bronco SUV and Ranger midsize pickup. Ford originally planned to budge Concentrate production to a fresh, $1.6 billion plant in San Luis Potosi, Mexico, but the company canceled those plans in January, less than a year after announcing them. Ford then planned to build the cars at its existing plant in Hermosillo.
Ford said at the time the stir would save $500 million, and it now says building the car in China will save an extra $500 million, for a total savings of $1 billion in production costs.
«We`ve done a lot of research and consumers care a lot more about the quality and the value than they do about the sourcing location,» Joe Hinrichs, Ford`s president of global operations, said in a conference call with some reporters Tuesday. «iPhones are produced in China, for example, and people don`t indeed talk about it.»
General Motors last year became the very first U.S. automaker to import a vehicle from China with the launch of the Buick Envision. It also makes the Cadillac CT6 plug-in hybrid there. Volvo, which is possessed by China’s Geely Automobile Holdings, also builds some cars in China for the U.S. market.
Albeit it is cheaper to build and ship cars to the U.S. from Mexico than China, “this was not a variable cost decision,” Hinrichs said. “It permits us to free up a lot of capital” because Ford now has to retool only one plant — the Chongqing plant — rather than two to supply North America.
Given dwindling overall U.S. request for petite cars such as the Concentrate, “we thought this was the best balance of that cost/capital tradeoff,” Hinrichs said. Concentrate sales have fallen Nineteen.7 percent in the U.S. through the very first five months of the year to 67,146, according to the Automotive News Data Center.
Hinrichs said Ford planned to inform the White House this morning. There was no instant comment from the White House.
Asked if Ford was worried about having to pay a border tax, as President Donald Trump has threatened on vehicle imports from Mexico, Hinrichs said “the capital saving outweighs the risk” of a potential tax on the Chinese-built Concentrate.
Ford also said Tuesday it will invest $900 million at its Kentucky Truck Plant for production of the fresh Expedition and Lincoln Navigator SUVs. The budge will preserve 1,000 jobs at the plant, Ford said.
The investment goes beyond Ford`s pledge to invest $600 million there through two thousand nineteen as part of its two thousand fifteen contract with the UAW. Ford in late two thousand fifteen invested $1.Trio billion for production of its aluminum-bodied Super Duty, albeit that money was tied to its two thousand eleven UAW deal.
There was no comment from the UAW.
«Large SUVs are attracting a fresh generation around the world — and we`re finding fresh ways to produce the capability, versatility and technology that customers around the world indeed want with our all-new Ford Expedition and Lincoln Navigator ,» Hinrichs said.
«At the same time, we also have looked at how we can be more successful in the petite car segment and produce even more choices for customers in a way that makes business sense.»
Reuters and Bloomberg contributed to this report.
