The supplier park next to Ford Motor Co.'s Valencia, Spain, plant will double in size following the decision to produce the next-generation Ford Fiesta and Mazda Demio replacement there.
Ford will begin assembling the Fiesta at Valencia during the second quarter of 2002. Then Mazda will begin building the replacement for its Demio supermini at the plant in the first quarter of 2003, marking the launch of Mazda manufacturing in Europe.
The strategy is designed to help the struggling Japanese maker - of which Ford owns 33.4 percent - offset currency fluctuations. Mazda may also build a second car at Valencia later, the replacement for its 323.
The supplier park, which covers 2,178,000 square feet, will expand to take in new suppliers. There are 41 suppliers on-site, and 10 to 20 will be added, said Antonio Ades, Valencia plant operations manager.
The Valencia regional government is spending $28.5 million to develop the supplier site.
Valencia, already Ford's most flexible plant, will produce four models: the Ford Focus, Ka and Fiesta and the Demio replacement.
By adding Fiesta to Valencia, Ford is making up for the capacity it will lose when it stops building cars at its Dagenham, England, plant during the first quarter of 2002. Cologne, Germany, the new lead factory for Ford's supermini, will begin building Fiestas this year. Cologne will make the regular Fiesta hatchback and a new compact minivan-style derivative.
Ades said Valencia's proven flexibility helped it to get the Mazda business. Ford and Mazda had narrowed their choice of Mazda sites to Valencia and Saarlouis, Germany, where Ford makes Focus.
Ades would not say how much Ford is spending to upgrade Valencia's assembly operations.
Ford also said it is investing $199 million to construct a new line at Valencia to build a new four-cylinder engine.
Valencia will be the sole European source for the engine, which will be used in the Mondeo.