Ford Motors‘ recently announced that it is investing $1.6 billion in a new plant in Mexico to produce more small cars. While construction of the new plant is expected to begin in the summer of 2016, production will start from 2018. Ford did not specify the vehicles which will be produced in this plant. Mexico is Ford’s fourth largest vehicle manufacturing site for global customers and the company has been manufacturing vehicles in this region since 1925. Given the lower cost of manufacturing in Mexico, Ford’s investment in a new plant in this country is aimed towards boosting profitability in the small car segment and we believe this is a positive development for its shareholders.