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Some Automakers Moving Production to the U.S. and Abroad

March 12, 2014

It seems like automakers cannot keep still. There is a lot of movement in terms of production lately, both to the United States and to other countries.

One country that is slowly becoming an automotive hotspot is Mexico, where Japanese automakers are moving for manufacturing. It has long been a preferred spot for domestic car manufacturers. Detroit’s Big Three—Ford, Chrysler and General Motors—have had factories in the country since the 1960s.

Japanese automakers followed suit. Nissan Motor Co. was the first one, building its first plant in Mexico back in 1966. It currently has 3 factories there, the newest of which opened in November last year in the city of Aguascalientes. Honda Motor Co. and Toyota Motor Corp. eventually caught up.

The latest carmaker to move assembly south-of-the-border is Mazda Motor Corp. The Asian auto manufacturer opened its newest assembly plant in Salamanca, Mexico on February 27th. Mazda closed its production plant in Michigan 2 years ago.

Due to the influx of automakers, Mexico is expected to become a leader in auto exports by next year. The country is ideal for auto manufacturing because it offers a number of advantages, especially for the Japanese makers. Carmakers can benefit from reduced production costs due to less expensive labor, as well as better availability of autos as a result of faster access to dealerships, among others.

While most automakers are bringing manufacturing to Mexico, Ford is bringing manufacturing back from Mexico. The company recently announced that it will move the production of the all-new 2016 F-650 and F-750 medium-duty trucks to Ohio beginning early next year. The aforementioned trucks will be hitting the showrooms in spring 2015.

Ford’s Ohio Assembly Plant, located at Avon Lake, was opened back in 1974. It currently produces the E-series fleet consisting of vans and other commercial autos. The production of the E-Series cargo and passenger vans will be discontinued later this year and the vehicles will be replaced with the all-new 2015 Ford Transit. Production of the Transit will begin this spring at the Kansas City Assembly Plant located in Claycomo, Missouri. Meanwhile, the Ohio Assembly Plant will retain the production of the Econoline cab-chassis and cutaway commercial vehicles.

The future of the Avon Lake factory was secured by the 2011 collective bargaining agreement between Ford and the United Auto Workers. The automaker will be investing $168 million to retool the plant for the production of the brand’s latest medium-duty trucks.

In other news, Chrysler is about to close a deal to have its Jeeps manufactured in China for local sale. Fiat Chrysler Automobiles Chief Executive Sergio Marchionne recently mentioned that they have been working to secure a deal with Guangzhou Automobile Group to kick-start the local production of Jeeps in China.

Most of the Jeep models are built in the U.S., then exported abroad. Unfortunately, China’s policies regarding imported cars are making it difficult for foreign carmakers like Chrysler to penetrate its fast-growing market. As a result, non-domestic carmakers are compelled to work with local manufacturers for the production of the former’s vehicles.

Fiat Chrysler and Guangzhou Auto intend to construct a $771 million production plant in Guangzhou in southern China. The factory will have a production capacity of 60,000 units annually. According to Jeep CEO Mike Manley, the Cherokee and the Renegade compact crossover are the main candidates to be manufactured in the Guangzhou plant for the local market.

Photo credit: Nicole Yeary/ Flickr/ CC BY

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