Ford is to invest US$1.3bn and hire 1,000 more workers at its Hermosillo, Mexico, plant as it launches the redesigned 2013 Fusion and Lincoln MKZ midsize sedans.

The MKZ is the first completely new vehicle in Lincoln's strategy to compete more effectively in the luxury car market. The brand has also shrunk its US dealer network in 130 metro markets to improve profitability - some dealers are reporting as much as a 60% increase in sales.

Sales of the new Fusion are expected to be strong enough to warrant investment in Mexico and US$555m at the AutoAlliance International in Flat Rock, a Ford-Mazda joint venture, which will add a second shift to produce the new model.

Mark Fields, Ford’s president of the Americas, said: “Ford is making a significant investment in Mexico and a significant commitment to the employees there. The midsize sedan market is significant, growing and one of the most competitive in the industry."

Ford has been making cars in Mexico for 87 years and began Fusion production there in 2005.

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