Ford Motor Company And Audi Announce Large Expansion Plans

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Ford Motor Company And Audi Announce Large Expansion Plans

Ford Motor Company (NYSE:F) announced its plan to invest $773 million to modernize its Dearborn Stamping Plant and add four press line to manufacture its next-generation F-series trucks. The company will also refit its Michigan Assembly Plant to increase its output for small cars.

The automaker is also planning to invest in three other plants including the Van Dyke Transmission Plant, Livonia Transmission Plant and Sterling Axle Plant. Ford Motor Company (NYSE:F)’s investments next year is part of the $6.2 billion total investments committed by the automaker in its contract with the United Auto Workers in 2011.

Ford Motor Company (NYSE:F) expansion plan will create an additional 2,350 jobs in southeast Michigan next year. According to Jim Tetreault, vice president for North American Manufacturing of Ford, “We’re absolutely on track with all of the commitments.”

The automaker will spend $335 million for the Dearborn Stamping Plant to manufacture new models of F-Series trucks that would meet the fuel economy standards of the federal government.

LMC Automotive senior analyst Joe Langley opined that Ford should retool its new models of F-150 strategically to avoid shortages. According to him, Ford cannot afford to stop the operations of its Dearborn Plant even for just one month to retool it.

The company will also invest $161 million to modernize its Flat Rock Assembly plant to increase its flexibility and capability to build different types of cars. The plant will handle the production of Taurus and Lincoln MKS. It will also take over the spillover production for the Fusion midsize sedan temporarily.

Ford will invest $60 million for its Assembly Plant in Wayne. The company will add two stamping lines to increase its production. The plant is currently manufacturing five types of cars and operating above capacity.

The company will invest $85 million for its Sterling Axle Plant, $87 million for the Van Dyke Transmission Plant and $74 million for Livonia Transmission Plant.

On the other hand, Audi, a subsidiary of Volkswagen AG (PINK:VLKAY) (PINK:VLKPY) (ETR:VOW) announced plans to invest $17 billion (€13 billion) to expand its production and develop new cars as the company until 2016.

Audi allocated more than €10.5 billion to build a new plant in Mexico, develop new cars and technologies such as lightweight auto design, and to increase its production capacity in China and Hungary.

In a statement, Volkswagen CFO Axel Strotbek said, “We will keep investing large sums to pursue our growth strategy. The expansion of our global manufacturing infrastructure will help us to continue growing.”

Volkswagen AG (PINK:VLKAY) (PINK:VLKPY) (ETR:VOW) aims to become the largest car manufacturer worldwide by 2018, and its target for Audi, is to sell at least 2 million cars per year. The company also aims to surpass the sales performance of BMW by the end of the decade. BMW plans to increase its sales by 4.6 percent to 1.54 million cars next year. According to IHS Automotive, BMW will beat Audi’s 1.1 percent sales growth or 1.44 million cars.

Germany’s luxury-car manufacturers such as Audi, BMW (BIT:BMW), and Daimler AG (PINK:DDAIF) (ETR:DAI) (FRA:DAI)’s Mercedes-Benz managed to maintain sales growth by selling their cars in China and United States, despite the ongoing debt crisis in Europe.

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