Ford to build the Focus in China instead of Mexico

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Ford said Tuesday it plans to move production of its Ford Focus small vehicle from the U.S.to China, where it already makes the Focus for Chinese buyers.

"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 Joe Hinrichs, Ford executive vice president and president, Global Operations.

Faced with the possibility of a criticism by President Donald Trump, who has demanded that the automakers stop moving their production plants overseas, Ford said that its measure will not cost jobs to the United States. After that, the plant will be converted to produce the Ranger midsize pickup truck in late 2018 and the Bronco midsize SUV in 2020. Ford executives have said that while it can make money off of SUVs built in the US, it needs to produce small cars in other countries to keep their sticker prices low enough to compete.

Ford will shift production of the Focus compact vehicle from the United States to China. That's why the next Focus will be built in China, where Ford has advanced factories that can produce high-quality vehicles at lower cost than it could in the US or Mexico.

Sales of small cars have dropped sharply in the US and companies are seeking to cut costs making them.

"Trump criticized Ford during the campaign for its decision to move small-car production from MI to Mexico", NPR's Sonari Glinton reported last November.

Ford isn't going to discontinue the Focus: It's a huge seller in Europe and China, and while USA sales have fallen, they're still significant. But over the last few months, Hinrichs said, Ford decided it could save another $500 million in tooling and other manufacturing costs if it moved production to China. Most new North American Focus models initially will come from China, with additional variants coming from Europe later.

Meanwhile, Tesla is close to an agreement to produce its electric cars in China for the first time, Bloomberg reported Monday. They're already making the Focus in China. Ford needed to find a low-priced way to produce them. Translation: Ford will have to price the next Focus aggressively, at least in the U.S.

The move runs counter to the U.S. auto industry's recent efforts to highlight American production amid intense criticism from President Donald Trump. General Motors Co. started importing the low-volume Buick Envision midsize SUV from China in 2016.

Ford shares were down nearly 1% on Tuesday morning.

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