Months after Ford Motor Co. earned the praise of President-elect Donald Trump by canceling construction of a plant in Mexico to build the Focus, the automaker announced another big change of plans: Production of the next-generation Focus will be moved to China instead of Mexico, and Ford will import the Chinese-made cars to the U.S.
This marks the first time Ford will import Chinese-made vehicles to the U.S. Ford says the change in plans will save the company $1 billion.
The automaker said Tuesday it will start production in the second half of 2019 on the new model at its Changan facility in Chongqing, China. The North American model is currently manufactured at the Michigan Assembly Plant in Wayne, where it will stay until mid-2018.
It’s the latest change as Ford works to find a place it can make the small car as sales of the vehicle continue to slip and profit margins narrow.
Ford in January under former CEO Mark Fields canceled plans to build a $1.6 billion plant in Mexico to build the new Focus. The company said then that it would instead build the car in an existing plant in Hermosillo, Mexico.
The plant cancellation, coupled with an investment announced for a Michigan facility, garnered praise from Trump, though Ford had no plans to keep Focus production in the U.S. at the time.
While Ford and its Chinese joint-ventures produce vehicles in China, this will mark the first time a Chinese-made Ford vehicle is imported to the U.S. from those operations. Ford has increased U.S. exports from both the Ford brand and its Lincoln luxury brand to China in recent years while the company works to grow its footprint in the country.
The company announced in March plans to build an all-new Lincoln SUV in China to be sold exclusively in that country.
The automaker has been exporting to China for a few years. It began shipping the all-new Lincoln Continental to China in late 2016. In February, Ford started shipping its 2017 F-150 Raptor to China, marking the first time the automaker exported a U.S.-built F-Series truck to the country.
Moving Focus production to China will save Ford $1 billion compared to the original plan to build that new facility in Mexico, according to Ford. The company saved $500 million by axing plans to build the plant, and the move to China will save another $500 million, the company said in a statement.
“Finding a more cost-effective way to deliver the next Focus program in North America is a better plan, allowing us to redeploy the money we save into areas of growth for the company — especially sport utilities, commercial vehicles, performance vehicles as well as mobility, autonomous vehicles and electrified vehicles,” said Joe Hinrichs, Ford executive vice president and president, Global Operations, in a statement.
The company said moving production of the Focus to China will not result in any job cuts for U.S. hourly employees at the Wayne facility. Michigan Assembly will be converted to make the new Ranger pickup starting in late 2018, and the new Bronco SUV in 2020 once Focus production is moved.
“Additional variants” of the next-generation Focus will also come from Europe following the shift, with most of the new North American models initially coming from China, according to a statement from Ford.
Ford said the new Focus will be roomier and “packed with technology.”
Ford joins the likes of General Motors Co. and Volvo Cars, which are building cars in China and importing them to the United States. GM became the first of the Detroit Three automakers to import from China. It sells the Chinese-made Buick Envision SUV and the Cadillac CT6 plug-in hybrid in the U.S.
On Tuesday, Ford also announced it would increase a planned investment its Kentucky Truck Plant by $300 million to build the all-new Expedition and Lincoln Navigator there. Ford negotiated as part of the 2015 United Auto Workers contract $600 million in investment for that plant.
The $900 million total investment will help Ford retain 1,000 existing jobs at the facility that employs close to 7,600 full-time hourly workers, the company said.
“Large SUVs are attracting a new generation around the world – and we’re finding new ways to deliver the capability, versatility and technology that customers around the world really want with our all-new Ford Expedition and Lincoln Navigator,” said Hinrichs in a statement. “At the same time, we also have looked at how we can be more successful in the small car segment and deliver even more choices for customers in a way that makes business sense.”