Ford 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. 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 ($887 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.
Both models are expected to be redesigned in mid to late 2020, when Ford plans to shift production to Chongqing, to a joint-venture plant operated with Ford's Chinese partner Changan Automobile Group, according to sources connected to Ford's component suppliers who are familiar with the automaker's future production plans.
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 could blunt U.S. President Donald Trump's threats to repeal or revamp the North American Free Trade Agreement.
As with the Focus move, the decision to build the Fusion in China also signals a shift in strategy at Ford, which is responding to dwindling U.S. consumer demand for passenger cars in favor of more expensive and more profitable trucks and SUVs.
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.