Ford Motor Co. has announced that they will move the production of small cars from the U.S. to Mexico as a means to reinvent the automobile market's business in the hopes of cutting production costs and increase profitability.
Last August, Ford Motor Co. Chief Financial Officer Robert Shanks revealed that the company is expecting a decline in car sales and productions. Given this, the company has decided to cut their costs, increase profitability, and reinvent the small cars market by moving the production to Mexico.
As reported by Market Watch, Ford Motor Co. CEO, Mark Fields revealed last Wednesday that for the coming two to three weeks, they will start to produce their small vehicles in low-cost areas such as Mexico. They felt that moving production from the U.S. to Mexico will afford the company a remedy for the expected decline in car production.
The production of the brand's flagship models such as their SUVs, trucks, and vans, along with other models which are not deemed to be small cars will continue to be produced in Michigan, U.S.
The move had been deemed a more practical change for Ford Motor Co. not only due to the cheaper means of producing cars but to address the higher demand for these units in Mexico. Furthermore, since the small cars of the company are considered to be price-sensitive, minimization of the production costs would afford them a competitive advantage against market heavyweights.
In other news, USA Today reported that presidential candidate for the 2016 elections, Donald Trump, saw the shift in a different light. He manifested that the change of production venue to Mexico is an "absolute disgrace" for the U.S. since he felt that it will affect worker jobs in the U.S. significantly.
In fact, Trump's allegations were backed up by UAW President Dennis Williams.
"There is no reason, mathematically, to go ahead and run to countries like Mexico, Thailand, and Taiwan. We'll recognize there is a huge problem in Mexico. So we have to address it as a nation," Williams said.
Fiat Chrysler Automobiles also wished to follow suit to Ford Motor Co.'s cost-cutting moves as they had declared that they will stop car productions in the U.S. by the end of this year. In fact, General Motors, Hyundai, Honda, Mazda, Nissan, Volkswagen, and Toyota also planned on doing the same change in car production venue to Mexico as well.
Ford Motor Co. announced they will feature shared mobility and driverless cars in the future and to make that a successful venture, they have decided to shift car production to Mexico in the hopes of increasing profits and cut productions costs.
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