Ford announced today it will be investing $2.5 billion in Mexico on two plants to increase its engine and transmission production.

After a couple of days of declining to comment about the possibility, Ford officials today announced they are spending $2.5 billion to build two new plants in Mexico to build engines and transmissions.

“Ford is making a significant commitment to our business in Mexico with investment in two new facilities, while aiming to make our vehicles even more fuel-efficient with a new generation of engines and transmissions our team in Mexico will build,” said Joe Hinrichs, Ford’s president of The Americas.

“These new engines and transmissions will help deliver even better driving experiences and fuel economy gains for customers around the world.”

The facilities, which are expected to generate 3,800 jobs, will be built in the states of Chihuahua and Guanjuato, respectively.

Ford is spending $1.1 billion to build a new engine facility within its existing Chihuahua Engine Plant. It will produce a new gasoline-powered engine.

The new site will allow Ford to export engines to the U.S., Canada, South America and the Asia-Pacific region, supporting the company’s growing small car lineup.

The automaker is spending an additional $200 million to expand production of Ford’s current I-4 and Diesel engines in Chihuahua. As a result, the Ford Engine Plant in Chihuahua will become the biggest engine plant in Mexico.

Ford is also building a new transmission plant onsite of transmission supplier Getrag, which is based in the City of Irapuato in the State of Guanajuato. This $1.2 billion investment brings approximately 2,000 new jobs.

This new plant – Ford’s first transmission facility in Mexico – will produce two all-new automatic transmissions for key products primarily in South America, Europe and Asia Pacific as well as other North American markets.

(Ford, Toyota spending $3.5 billion to expand in Mexico. For more, Click Here.)

“Today’s announcement is an important milestone in Ford’s 90-year history in Mexico,” said Gabriel Lopez, Ford of Mexico’s president and CEO, in a statement. “Currently within Ford, Mexico is the fourth vehicle producer, the fourth-largest engine producer and is the second-largest nation supplying Ford’s global manufacturing facilities.”

Ford has 11,300 employees in Mexico. The Ford Fiesta, Fusion and Lincoln MKZ as well as the hybrid versions of both are manufactured in Mexico. Industry analysts note that Mexico has a number of critical advantages luring major investments into the country. That includes not only a low wage base and a relatively weak currency, but also the fact that Mexico has negotiated more free trade agreements than any other country besides Israel.

(Click Here for details about VW launching Tiguan at Puebla, Mexico, plant.)

Ford has already taken advantage of those benefits with a number of Mexican facilities that include the Chihuahua engine plant and stamping and assembly lines in Cuatitlan and Hermosillo.

In recent weeks, Ford has announced several major overseas investments, including a $760 assembly plant going into Hangzhou, China, and a $500 million plant to be built in Maraimalai Nagar, India.

(To see more about Toyota’s expansion in Mexico, Click Here.)

Ford’s growth in Mexico mirrors the efforts of other automakers looking for a low-cost manufacturing base that can export vehicles and components to North and South America as well as Asia. Toyota, Volkswagen, Daimler, Nissan, Kia, General Motors and Honda have all either announced plans or recently started new operations in Mexico.