Ford confirms $2.5B Mexico investment

April 20 05:13 2015

Ford confirmed Friday that it is investing $2.5 billion in new engine and transmission plants in the Mexican states of Chihuahua and Guanajuato, respectively. The investment, which Ford says will created 3,800 direct jobs, has been widely expected this week. It follows an announcement by Toyota on Wednesday that it is spending $1 billion in Mexico on a new factory to build radically redesigned 2020 Corolla compacts starting in 2019.Ford+Reports+Profit+Ninth+Consecutive+Quarter+fqGVWYMWnCIl

Toyota says the plant will build 200,000 Corollas a year for Mexico and elsewhere in North America. Corolla is Toyota’s biggest seller in Mexico, accounting for about 20% of the automaker’s sales there.

Ford says it’s drivetrain investment involves three projects:

•A new engine plant in Chihuahua. It will be built within Ford’s Chihuahua engine plant. The company will make a new gasoline engine there, aimed at exports to the U.S., Canada, South America and the Asia-Pacific region for Ford’s small-car lineup.

•Expansion of Ford’s four-cylinder gasoline engine and diesel engine lines in Chihuahua. It will increase production capacity and make it Ford’s biggest engine plant in Mexico.

•A new transmission plant – Ford’s first in Mexico – in Guanajuato. That will be constructed within the premises of transmission supplier Gertag, a longtime Ford partner that supplies many automakers with gearboxes. This transmission plant will produce two automatic transmissions for key products primarily in South America, Europe and Asia Pacific as well as North American markets.

Before this week’s Toyota and Ford moves, automakers had announced between 2011 and 2014 that they’d build seven new North American auto assembly plants in Mexico. The country has free-trade agreements with several times more nations than the U.S. does, making it easier and cheaper to export worldwide from Mexico.

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