Ford to build next-gen Focus in China, not Mexico

Ford's president of global operations Joe Hinrichs says the move will save Ford US$1 billion, including $500 million from cancelling a new plant in Mexico that was meant to build the Focus.

United States carmaker Ford, which abandoned a plan to produce the new make of Ford Focus cars at a new factory in Mexico under pressure from Donald Trump, will make them in China instead.

Ford's MI plant will continue to produce the Focus through mid-2018, and then will be converted to make a pickup truck and SUV, so no hourly jobs will be lost.

By reshuffling business layout, Ford is saving one billion USA dollars in investment costs, improving the financial health of its Focus business and further improving manufacturing scale in China.

China has emerged as a key market for Tesla, which saw its China revenues surpass $1 billion previous year, more than tripling the electric auto manufacturer's 2015 revenue and making the Chinese market its largest, in terms of sales, after the U.S. Translation: Ford will have to price the next Focus aggressively, at least in the U.S.

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The move freezes any US-based assets of the individuals and entities, and effectively blocks them from using much of the global banking system.

"Building in China [for the USA market] will become more common", said Michelle Krebs, senior analyst for AutoTrader.

Executive VP Joe Hinrichs said the demand for SUVs has increased globally and Ford is keeping up by updating the Navigator and Expedition models.

The move will save Ford $500m-$1bn more than anticipated when it scrapped plans for the new Mexico plant. When those plans were canceled, Ford said it would build the auto at an existing factory in Hermosillo, Mexico.

Hinrichs said Chinese wages are lower than wages in Mexico, although the cost to ship the vehicles erases some of that advantage.

Image copyright Scott Olson/Getty Image caption Savings from the move will allow Ford to invest in other parts of the business such as SUVs and electric cars. The company will be testing both consumer appetite for China-built cars and the tolerance of President Donald Trump, who has criticized automakers for importing vehicles from overseas. The Envision has only been built in China, which is General Motors' largest market. This is in addition to the $1.3 billion investment and 2,000 jobs created at that plant in late 2015 to build the all-new Ford Super Duty.

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