(Reuters) – Ford Motor Co (F.N) plans to consolidate global production of midsize sedans in China in 2020 and ship them to the United States and Europe, three sources said on Wednesday.
In North America, the Fusion sedan currently is built in Hermosillo, Mexico, while in Europe, the companion Mondeo sedan is built in Valencia, Spain.
Both models are expected to be redesigned in mid to late 2020, when Ford plans to shift their production to Chongqing, to a joint-venture plant operated with Ford’s Chinese partner Changan Automobile Co (000625.SZ), according to sources connected to Ford’s component suppliers who are familiar with the automaker’s future production plans.
A Ford of Mexico spokesperson declined to comment.
The move is part of Chief Executive Officer Jim Hackett’s ongoing effort to reduce inefficiency and trim costs, while shifting the company’s emphasis away from sedans toward sport utility and crossover vehicles, especially in North America.
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.
The move suggests China could play a much larger role in future vehicle production for North America, perhaps eclipsing Mexico as a low-cost manufacturing source.
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.
Additional reporting by Laurence Frost in Paris and Anthony Esposito in Mexico City; Editing by Andrew Hay and Cynthia Osterman