Ford Motor Company (NYSE:F) announced it will be building its new GT car in Canada. The new coupe is a high-performance vehicle in the spirit of past GT models. The car was unveiled at the Detroit auto show. The new two-door will be available for purchase in late 2016. The car will be built in partnership with Multimatic Inc., a private manufacturer. The companies have joined together in the past to build Fords FR500c and Boss 302R race cars. Mutimatic specializes in lightweight composite technology and their carbon material is lighter than other types giving the car more speed and power.
Ford Motor Company (NYSE:F) had recently announced news about its famous Mustang model. For the first time ever the industry legend will be built on foreign lands. The former Michigan built Mustang will build in China under Fords new export strategy that will expose the Mustang to 120 foreign markets. The strategy is to build cars that can be sold anywhere on the planet.
Building US models for foreign sales can be complicated. Besides having to print materials in different languages often time’s steering wheels need to be placed opposite to their US position and engine specs need to be adhered to.
Most countries levy heavy taxes on imported vehicles based on the engines specs. In China, all engines over 4 liters are taxed at double the normal rate. For smaller cars that’s not an issue but the Mustang comes standard with a 5.0 liter 435 HP V8 engine. This raises the retail price as extra cost are passed to the consumer which makes the vehicle unrealistic to buyers when compared to domestically made vehicles. In China the new Mustang would cost $130k USD, in the US it starts at $35,000. So Ford put a smaller engine in the foreign version and is sending it to market this year.
The stock has been strong and the effects of the recent run up have been technically sound. The moving averages have returned to a normal stance and the momentum indicators are very high. There is still strength in the stock and if it can break through $15.50 there are no headwinds until $17.50.