Ford to Boost Capacity at Valencia Plant

 

FORD TO BOOST CAPACITY AT VALENCIA PLANT

Ford to Boost Capacity at Valencia Plant

Ford Motor Company plans to boost output at its Valencia plant by 40 percent in 2015, thanks to the final part of a 2.3 billion euro expansion of its operations in Spain.

The US car manufacturer is aiming to churn out about 400,000 vehicles at its Almusaffes plant this year, in what has been touted as the biggest ever investment in the Spanish automobile industry. It will have the capacity to potentially build up to 450,000 a year.

The Valencia site is one of Ford’s biggest worldwide and it exports about 80 percent of vehicles produced there to 75 countries, including to its home market. It began its latest investment drive with an initial 1.1 billion euros in 2011.

The Almusaffes factory now employs about 8,000 people, compared with just under 5,000 in 2013. It is considered a state-of-the-art facility where Ford builds its Mondeo models, as well as the Kuga SUV, Transit Connect and Tourneo Connect.

 

 

COMPETITIVE LABOUR MARKET ATTRACTS INVESTMENT

Ford’s bet on its Spanish plant is another example of the trend of auto production moving south in Europe, where wages tend to be lower. Last year, Ford closed a factory in Belgium as part of a restructuring of its loss-making European business. Spain’s labour market is an estimated 40 percent less expensive than those of Europe’s other biggest car-making countries like Germany and France.

The US firm’s latest investment in Spain will allow it to build six different model lines, up from the current four, and expand exports to markets outside Europe. But Ford is not the only major auto manufacturer to choose more cost efficient Spanish plants and transfer production of their top models there. Volkswagen also chose to concentrate global production of its Polo model at its plant in Navarre, in northern Spain.

SPAIN AUTO INDUSTRY DRIVES ECONOMIC GROWTH

While Ford’s investment in the Almusaffes plant will help accelerate the firm’s expansion in Europe, it will also support a key driver of Spanish economic growth and job creation. The automobile sector was the third biggest exporter in 2014, accounting for 14.8 percent of total exports, up from 14.3 percent in 2013.

Furthermore, including auto parts manufacturers which supply production lines, the industry created 26,800 jobs in 2014, according to data provided by the car producers’ association ANFAC. But firms like Ford and Volkswagen are not just providing jobs at the factory floor level. They are both leaders in technical innovation and are commited to investment in R&D  in their Spanish plants.

For information on investing in Spain, contact corporate law firm Argali Abogados.

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