WASHINGTON (Reuters) - Ford Motor Co <F.N> said Tuesday it will cancel a planned $1.6 billion factory in Mexico and will invest $700 million at a Michigan factory, after it had come under harsh criticism from President-elect Donald Trump for its Mexican investment plans.

The second largest U.S. automaker said it would build new electric, hybrid and autonomous vehicles at the Michigan plant.

Ford Chief Executive Mark Fields on Tuesday said the decision to cancel the new plant in Mexico was in part related to the need to "fully utilize capacity at existing facilities" amid declining sales of small and medium sized cars such as the Focus and Fusion.

Fields also used the occasion to endorse "pro growth" tax and regulatory policies advocated by Trump and the Republican led Congress.

Trump repeatedly said during the election campaign that if elected he would not allow Ford to open the new plant in Mexico and would slap hefty tariffs taxes on imported Ford vehicles.

A Ford source said the Trump team was told this morning about the decision