Ford Focus production in Saarlouis will end in 2025; Chinese car maker BYD is reportedly one of several potential buyers.
Ford will hold talks with Chinese giant BYD next week concerning a sale of the American firm’s factory in Saarlouis, Germany, a report has claimed.
Citing sources familiar with the matter, the Wall Street Journal reported that discussions are in a preliminary stage and might still fall through. As such, the terms of a potential deal – such as the price – are currently unknown.
Ford is also speaking to 15 other investors, said the WSJ, ranging from manufacturers to financial investors that could partner with a maker.
Ford said in a statement supplied to Automotive Daily Network partner Autocar: “As we’ve previously said, we’re investigating various options for the future and sustainable use of the Saarlouis site. As part of this process, we’re in ongoing discussions with a number of potential buyers and have nothing further to add at this time.”
BYD has also been contacted for comment.
The Ford Focus is currently built at Saarlouis, but Ford announced last June that the model’s production run will end in 2025 and hasn’t indicated plans for any models to take its place on the line after that date.
Ford of Europe head Stuart Rowley told journalists after the announcement that “we don’t have in our planning cycle an additional model that goes into Saarlouis”, hinting at the plant becoming redundant.
Meanwhile, Ford’s plants in Cologne (Germany), Craiova (Romania) and Valencia (Spain) have each been confirmed to build various EVs for European markets.
Around 4600 people are employed at Saarlouis, and it’s not yet clear if they could be retained by any new owner of the factory. Earlier today, it emerged that Ford is planning to axe up to 3200 jobs in Europe as it shifts development work to the US.
BYD is in the early stages of its expansion into the European market. It began selling cars in Belgium, Denmark, Luxembourg, Sweden, the Netherlands and Norway late last year and is already selling electric cars in Australia which are imported from China.
Its initial run of European EVs – the Atto 3 crossover, Han sedan and Tang SUV – are all built in Shenzhen, China. It stands to gain significantly from opening a European factory, reducing shipping costs and lead times for customers.
As such, the firm was “seriously thinking about some localisation plans”, Brian Yang, assistant general manager of BYD Europe, told Autocar last August.
Yang added that the company was “quite open” to offering its new e-Platform 3.0 architecture to other manufacturers.
“We’re quite open to the whole industry. We are not competitors. We can work together to really grow the whole EV market. This is our philosophy,” said Yang.
Maximising efficiency in Europe will be critical if BYD is to achieve its goal of doubling its sales year on year to four million.
Establishing a battery-production facility to complement a vehicle assembly line could also help the Chinese firm to avoid tariffs mandated by the European Union’s rules of origin.
This legislation requires that a significant proportion of the value content of an EV – and its battery pack – sold in the region is locally sourced.
From 2024, the minimum is 45 per cent of the content in an electrified vehicle and 60 per cent of the content in its battery pack, with these figures set to rise over the following years.
However, BYD has currently only hinted at plans to assemble cars in Europe, not their battery packs.
Chinese rival Nio previously indicated that it intends to build cars in Europe, having launched in Germany and Norway, withright-hand drive – for the UK for now – following this year.
In 2021, Nio chairman William Li said: “I understand that in Europe, there is manufacturing capacity. We can also explore the possibility to work together with other OEMs and to discuss joint manufacturing with them.”
Additional reporting by Felix Page