Ford To Pump $870M Into Valencia Plant For Kuga Production

Ford Motor Company (NYSE:F) announced that it will invest a sum of more than $870 million at its plant in Valencia, Spain. This is in line with the auto giant’s objective to manufacture its next-generation Ford Kuga medium-sized Sports Utility Vehicle (SUV). Notably, since 2011, the company has invested a sum of around $3.5 billion in its Valencia operations.

Good news is that this huge investment of $870 million will help the Valencia’s operations secure productivity improvements and enhance cost efficiency. The hefty investment also showcases Ford’s commitment toward this European manufacturing location. Additionally, it will create job opportunities at the site. Currently, the location employs more than 8,000 people across all its operations.

Since 1976, Valencia Vehicle Operations and Engine Plant has manufactured more than 12 million vehicles and 16 million engines. It is also Spain’s one of the top automotive exporters. Apart medium-sized SUV Kuga, the hub is responsible for production of Tourneo Connect people-mover, Transit Connect light commercial vehicle models and the full range of Ford’s Mondeo, S-MAX and Galaxy models.

Ford Motor Company Price and Consensus

Of Ford’s total new passenger vehicles sales in Europe, SUVs contribute 25%. In the year so far, European sales of Kuga increased to 126,900 units, witnessing an improvement of 22% compared with the same period last year. Kuga is the third top-selling model in Europe after Fiesta and Focus.

Price Performance

The stock has lost 1.3% in the last 30 days, outperforming the 6.7% decline of the industry it belongs to.

Zacks Rank & Stocks to Consider

Ford carries a Zacks Rank #3 (Hold). A few better-ranked companies in the auto space are PACCAR Inc. (NASDAQ:PCAR) , Wabco Holdings Inc. (NYSE:WBC) and AB Volvo (OTC:VLVLY) each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

PACCAR has a long-term growth rate of 10%. Its shares were up 10.6% in the last three months.

Wabco has a long-term growth rate of 15%. Shares of the company were up 25.3% in the last six months.

Volvo has a long-term growth rate of 15%. Its shares were up 14.8% in the last three months.

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