The automaker expects to export more than 80,000 vehicles to China this year, including Michigan-built Mustang sports cars and Lincoln Continental luxury sedans.
President Trump already criticized the auto-maker for making vehicles outside the US, but it says this move will not cost any American jobs.
No U.S.jobs will be affected by shifting Focus production to China, Ford said, adding that it employs more U.S. hourly workers and builds more vehicles in the United States than any other automaker.
Ford slipped 0.8 percent to $11.15 as of 1:21 p.m.in NY trading.
Ford stressed that no American jobs would be lost in the China move.
China represents a massive and dynamic vehicle market, so these sales figures will be concerning to Ford, at a time when analysts have described their Chinese model line-up has been described as 'ageing'.
Ford Motor Company (NYSE:F) said that it is investing $900 million in Kentucky Truck Plant for plant upgrades to build the all-new FordExpedition and Lincoln Navigator, which begin arriving in dealerships this fall.
The company was building a $1.6 billion assembly plant for the next Focus model in Mexico, but it ran into stiff opposition from President Donald Trump and then canceled the project. He even falsely accused Ford of planning to shift all of its auto production and jobs to Mexico. Ford had earlier announced plans to shift its production to Mexico. He also says Ford wants to spend less money making a auto that doesn't sell very well.
Hinrichs said Ford planned to inform the White House this morning. The decision will save Ford around $500 million. "IPhones are produced in China, and people don't really talk about it", said Joe Hinrichs, Ford's president of global operations. Ford executives have said that while it can make money off of SUVs built in the US, it needs to produce small cars in other countries to keep their sticker prices low enough to compete. Until recently, Americans refused to buy Chinese-made cars, believing them to be unreliable.
"Building in China [for the US market] will become more common", said Michelle Krebs, senior analyst for AutoTrader.
In this context, the Focus move makes ideal sense. The conclusion was that it still made sense.
Ford is under great pressure to cut costs to shore up the billions of dollars it needs to invest in electric cars and self-driving vehicles. Ford will continue to make the Focus in Europe, and will also export some variants of the Focus from Europe to the U.S. General Motors Co. started importing the low-volume Buick Envision midsize SUV from China in 2016. But neither of those cars were ever built at a USA factory. "It's still cheaper to build in Mexico than China for the North American market if you have the capacity".
Scuttling the Mexico plans also comes as the U.S., Canada and Mexico are likely to renegotiate the terms of NAFTA. Meanwhile, Swedish luxury vehicle manufacturer Volvo is now owned by a Chinese company.