Ford to shift midsize sedan production out of Mexico – sources

(Reuters) – Ford Motor Co F.N has told suppliers it plans to shift production of midsize Fusion and Mondeo sedans out of Mexico and Spain in 2020 and move it to China, three sources said on Wednesday.

FILE PHOTO – The Ford Motor Company logo is pictured at the Los Angeles Auto Show in Los Angeles, California, U.S., November 30, 2017. REUTERS/Mike Blake/File Photo

The automaker said it will not ship those cars from China to the United States and Europe.

Ford did not address the future of the plants in Hermosillo, Mexico and Valencia, Spain that currently build midsize sedans for the North American and European markets, respectively.

Ford said last month it would invest more than 750 million euros (£660.8 million) in Valencia to produce a new generation of its Kuga sport utility vehicle.

Recent Ford documents shared with suppliers show the automaker plans to shift some Focus and Mondeo production to China, and no longer list Hermosillo and Valencia as production sites, according to sources familiar with the company’s plans.

Ford said in a statement “we have no plans to export the next-generation Fusion/Mondeo from China to North America and Europe. Fusion/Mondeo are an important part of the Ford car lineup. We will have more information to share about the next Fusion/Mondeo at a later date.”

Ford Chief Executive Officer Jim Hackett has taken a series of steps to cut the automaker’s production costs, and shift the company’s product lineup away from sedans toward sport utility and crossover vehicles, especially in North America.

Fusion sales in the United States are down 22 percent this year, while Mondeo sales in Europe are down 21 percent.

Ford in June said it would shift some production of its Focus small car from Mexico to China and import the vehicles to the United States.

Ford’s latest moves come as U.S. President Donald Trump has said he wants to significantly revamp or possibly exit the North American Free Trade Agreement that allows tariff-free shipments of vehicles to the United States from Mexico.

Last week, Ford said it plans to relocate production of a future battery electric vehicle to Cuatitlan, Mexico in 2020 to free up capacity at its Flat Rock, Michigan, plant to build self-driving vehicles in 2021.

Reporting by Paul Lienert in Detroit; Editing by Andrew Hay and Cynthia Osterman