Sectors

Ford to open new plant in Mexico: Reports

February 10
12:20 AM 2016

The US-based automaker Ford is reportedly intending to start a new plant in Mexico with an aim to boost its production capacity of US plants. The reports said that the news of the New Mexican plant comes after the signing of an expensive labour deal with UAW.

The automaker intends to build 500,000 units of Mexican capacity commencing in 2018, which represents over double the capacity that it constructed in 2015, Wall Street Journal said citing people close to the source. This move by the company reflects its rival General Motors' investment plan of 5 billion US dollar to multiply the production capacity in Mexico within 2018.

According to the Journal, the automaker will construct a fresh assembly complex in the location of San Luis Potosi and will also broaden its current factory that is close to the city of Mexico. This plan will enable Ford factories in the US to concentrate on more profitable sport-utility cars and trucks.

Last year, Ford produced 433,000 units of vehicles in Mexico, which represents 14% of its net production in North America. People familiar with the source told reports that the costs for the new plant is expected to exceed 1 billion US dollar. The construction of the new plant is anticipated to begin in late 2016.

In June, the automaker confirmed its intention to finish its production of Ford C-Max and Ford Focus at Wayne in 2018 and to shift the car production outside the nation, reports USA TODAY. According to Dennis Williams, President of UAW, the Mexican investment is a 'huge problem' and that the automakers including Fiat Chrysler, General Motors and Ford are making huge profits in North America and there is no need for them to shift their production to earn profit.

The automaker's plant in Cuautitlan presently constructs Fiesta subcompact vehicle and manufactured nearly 105,272 Fiesta cars in 2015, according to Automotive News. The C240 hybrid vehicle is anticipated to reach the market in 2018 as 2019 year model.

Last spring, Ford invested 2.5 billion US dollar to construct a transmission plant and an engine in Mexico. Mexico has attracted many automakers who poured billions of dollars in the territory that promises free trade, low pay and advanced logistics feature. Global car companies like Volkswagen AG, and BMW AG have opened a new plant in Mexico. South Korean car company, Kia Motors, is also intending to open a fresh Mexican plant in 2016.

Ford intends to design two models at the fresh Mexican plant, including the hybrid car that is made to compete with "Prius fighter" from Toyota. The Detroit automakers believe that Mexico will serve as a suitable place with high fundamentals. Mexico plants will continue to contribute to the automakers' future profit.

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