Bloomberg News

Mazda to Boost Mexican Plant’s Capacity to 230,000 Cars

January 04, 2013

Mazda Motor Corp. (7261), a Japanese carmaker forecasting a return to profit, said capacity at the plant it’s building in Mexico that will also make cars for Toyota Motor Corp. (7203) will be 21 percent larger than planned.

The Salamanca, Mexico, factory that is to make Mazda2 and Mazda3 small cars when it opens in 2014 will have capacity to produce 230,000 vehicles a year by March 2016, the company said today in a statement. Mazda in November said the plant would be able to build 190,000 cars annually, including 50,000 small cars it’s contracted to make for Toyota.

“This production capacity increase is an important part of Mazda’s drive to strengthen its overseas production base as laid out in our medium- to long-term plan,” Chief Executive Officer Takashi Yamanouchi said in prepared remarks for a New Year’s event in Hiroshima, Japan.

Mazda’s move into Mexico follows similar announcements by Japan’s Honda Motor Co. (7267) and Nissan Motor Co. (7201), which are all seeking lower-cost production facilities to make small cars for North America. Unlike Toyota, Honda and Nissan, Mazda imports all its vehicles sold in the U.S. from Japan, after ending production of Mazda6 sedans in Michigan.

The Hiroshima-based carmaker forecasts net income of 10 billion yen ($114 million) for the year ending March, after losing about 100 billion yen in the previous 12 months for a third annual loss in four years.

Mazda rose 6.3 percent to 185 yen as of the close in Tokyo trading, the highest since Aug. 10, 2011.

Yamanouchi said in an interview at the Los Angeles Auto Show in November that the company intended to enlarge the Mazda Motor Manufacturing de Mexico SA plant beyond the initial capacity figure, without elaborating. Mexico has both lower production costs and free-trade agreements with 37 nations that make it an appealing export base, Yamanouchi said.

Investment in the plant, a joint venture with Sumitomo Corp. (8053), totals about $650 million including the expansion, the company said. That’s up from $500 million when it announced the plan in June 2011. It will employ about 4,500 people by 2016, Mazda said.

To contact the reporter on this story: Alan Ohnsman in Los Angeles at aohnsman@bloomberg.net

To contact the editors responsible for this story: Jamie Butters at jbutters@bloomberg.net; Young-Sam Cho at ycho2@bloomberg.net


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