The new facility is expected to add 2,800 jobs by 2020.
DETROIT, MI - Ford Motor Co. confirmed Tuesday it is investing $1.6 billion in a new small car plant in San Luis Potosi, Mexico.
The new facility is expected to add 2,800 jobs by 2020. Construction of the plant begins this summer, and small cars are expected to be rolling off assembly lines there by 2018.
A Ford spokeswoman said the company is not yet announcing capacity, or which models will be built at the new facility.
Citing Mexican officials, Reuters reported in January that the new assembly facility in Mexico is expected to build about 350,000 vehicles a year.
Mexico is Ford's fourth largest country for manufacturing, after the U.S., China and Germany. Vehicles produced by Ford in Mexico are sold in the U.S., Canada, several South American countries and South Korea.
The Mexico investment is part of the automaker's One Ford global product and manufacturing plan. In making the announcement Tuesday, the company noted that it has also in the last five years invested $10.2 billion in U.S. production facilities, as well as $2.7 billion in Spain, $2.4 billion in Germany and $4.8 billion in China.
The company has had operations in Mexico for 91 years.
Ford confirmed last year that it plans to move production of the C-Max and Focus models outside the U.S. and hasn't named a specific location, though it is widely expected to be Mexico.
At the same time, the company is expected to build a Ranger mid-size pickup at Michigan Assembly beginning in 2018, and could also revive the Bronco SUV there.
The move is part of a production strategy by Ford that will focus its manufacturing on larger, more-profitable vehicles such as SUVs and pickup trucks in the U.S.
It's similar to Fiat Chrysler Automobiles' plans for North American production.
GM, too, announced in December 2014 a $5 billion investment in Mexico that will double its production capacity there by 2018.
Labor costs in Mexico are about one fifth of that in the U.S. Several of the Detroit automakers' foreign competitors also produce there, including BMW, Honda Toyota and Volkswagen, according to LMC Automotive.
Even as Ford pursues investment south of the border, the Dearborn automaker has also committed to spend $9 billion on production investments in the U.S through 2019.
But the UAW on Tuesday called the company's added production in Mexico a "disappointment" and "very troubling."
"For every investment in Mexico it means jobs that could have and should have been available right here in the USA," UAW President Dennis Williams said in a statement. "This is another example of what's wrong with NAFTA and why the TPP would be a disaster for the citizens of the United States."
Williams added that companies continue to turn to low-wage countries and import back to the U.S., calling it a "broken system that needs to be fixed."
Ford has also come under fire from U.S. presidential candidates, especially Donald Trump.
Trump has said that if he were president, he would slap a tax on any Ford products coming into the U.S. from a new plant in Mexico. The Republican candidate even took credit for Ford supposedly later altering its production plans in Mexico because of his haranguing, pointing to Ford's plans to move production of some heavier trucks to a site in Ohio.
However, Ford had already planned to do the move several years before Trump's presidential campaign had even begun, as part of negotiations in 2011 with the UAW.
And Democratic candidate Bernie Sanders took a jab at the automaker while speaking in Lansing last month, saying that "700 auto workers in Wayne are now out on the street" because Ford is building a plant in Mexico.
A spokeswoman for Ford said the company had already replaced the 700 positions laid off at Michigan Assembly at other U.S. plants.
"Ford is committed to continuing to invest in Michigan Assembly Plant and our workers by bringing new product to the plant starting in 2018," the company said in a statement at the time. "We are a major exporter of America-made cars and trucks and are deeply invested in the United States with 80,000 employees here."
According to the Asociacion Mexicana de la Industria Automotriz, Mesxico's auto trade association, Renault/Nissan has the largest automotive production in Mexico, with volume of about 823,000 units. It's followed by GM at 690,000, FCA at 504,000, Volkswagen at 458,000, Ford at 434,000, Honda at 204,0000, Mazda at 182,000 and Toyota at 105,000 vehicles produced there.
David Muller is the automotive and business reporter for MLive Media Group in Detroit. Email him at dmuller@mlive.com, follow him on Twitter or find him on Facebook.