Mazda Says Mexico Is Its “Most Important” Base

Mazda Motor Corp. describes its new $770 million small-car assembly plant in Mexico the company's most important strategic base.

The factory in Salamanca, which has initial capacity to build 140,000 cars per year, will initially make Mazda3 small cars for the U.S. market.

Mazda aims to expand the facility's annual capacity to 230,000 vehicles by early 2016. That's when it will add the Mazda2 small car and a derivative for Toyota Motor Corp.

Chairman Takashi Yamanouchi tells reporters at the factory's dedication that the factory's could supply vehicles to Europe and South America. He notes that Mexico's free-trade pacts with all three regions represent a combined annual market of about 40 million vehicles roughly half of total global demand.

Mazda has no other plant in North America and currently imports its entire product line from Japan. Yamanouchi says the Mexico facility will free the company of unpredictable swings in exchange rates, including a possible strengthening of the yen that would hurt profits on cars exported from Japan. With the new factory, Yamanouchi declares, Mazda "will never again go into the loss position."