Mazda Produces its 100,000th Automobile

by Murry Page

3 Jan 15 

mazmessenger.com

 

In February of last year Mazda CEO Takashi Yamanouchi, federal officials, state legislators, and mayors celebrated the opening of Mazda’s new assembly plant in Salamanca, Guanajuato. By the end of the year Mazda announced that it had produced its 100,000^th vehicle at the new plant, a Mazda2 destined for the European market.

The plant also builds the Mazda3 compact hatchback and sedan.

The president of Mazda de México Vehicle Operation (MMVO) told reporters “The production of one hundred thousand vehicles at MMVO is extremely significant, and we could not have done it without the support of our customers, our suppliers, and our employees, as well as that of the federal and local governments.”

The new Salamanca plant has an estimated annual production capacity of 140,000 units, but Mazda has plans to increase the plant’s output to 230,000 units by March 2016. The increase is in part due to the 50,000 Toyota-branded subcompact vehicles based on the Mazda2 that the automaker will build in México.

The Toyota vehicles will be built under contract with Toyota, beginning in the summer of 2015.

(from Car Scoops)

Mazda debuts Mexico facility

Friday, 28 February 2014 00:10 
BY BRENDAN CASE
Bloomberg News


MEXICO CITY – Mazda Motor Corp., Japan’s most export-dependent automaker, is staking its U.S. future on the new factory in Mexico that will be its first wholly owned plant in North America.

The $770 million facility that opened Thursday will shield Mazda, based in Hiroshima, Japan, from exchange-rate swings between the yen and the U.S. dollar, consultant IHS Automotive says. Mazda will also be able to cut shipping costs to the U.S. and benefit from Mexico’s web of trade deals covering more than 40 countries.

Mazda joins a rush by Japanese automakers to expand in Mexico following plant openings by Nissan in November and Honda last week. Toyota has contracted to have 50,000 cars built each year at the Mazda plant in Salamanca, Guanajuato, with Mazda 2 and Mazda 3 small cars making up the rest of the factory’s annual capacity of 230,000 vehicles.

“Without this plant, it would be very difficult for Mazda to maintain their position in the U.S. market,” IHS Automotive Managing Director Michael Robinet said in a telephone interview from Southfield, Mich. “They are a mass-market vehicle manufacturer and to be competitive in the U.S. market, you have to be building in North America.”

While the plant has already begun producing cars, Mazda held an official opening ceremony with President Enrique Peña Nieto.

Mazda’s U.S. sales of more than 280,000 vehicles ranked fifth among Japanese automakers in 2013, according to data compiled by Bloomberg. A venture that made Mazda 6 sedans in Flat Rock, Mich., with Ford ended in 2012.

Producing vehicles in North America for sales in the region will insulate Mazda against fluctuations in Japan’s currency, according to Sean McAlinden, chief economist of the Center for Automotive Research in Ann Arbor, Mich.

The yen gained 13 percent against the dollar in the decade ended in December, even as Prime Minister Shinzo Abe’s monetary easing weighed on the currency in 2013. The exchange rate was 102.38 yen to the dollar on Feb. 26. Mexico’s peso weakened 20 percent against the greenback in the same 10-year period, lowering manufacturing costs.

“Three years ago the yen was about 75 to the dollar and on every car they shipped here from Japan, they were losing money — a lot of money,” McAlinden said by phone. “In Mexico, the currency is roughly benchmarked to the U.S. dollar, which makes it look a lot safer to the Japanese.”

Automakers have committed $9.6 billion to Mexico since the start of 2011, with investments by General Motors, Ford and Volkswagen as well as Japanese automakers, according to the Center for Automotive Research.

Nissan, Mexico’s largest automaker by production and domestic sales, opened a $2 billion factory in November. Honda opened a plant last week in Celaya, Guanajuato, about 45 kilometers (28 miles) from Salamanca.

“It underscores the importance of North America,” Jeremy Barnes, a spokesman for Mazda, said in regard to the company’s plant in Mexico.

Toyota will also expand its Mexican manufacturing base under its plan to begin making small cars in Salamanca based on the Mazda 2 platform next year. The Toyota City, Japan-based automaker has a plant near the California border that produces Tacoma pickup trucks.

Toyota’s output in Mexico rose 15 percent last year to 63,724, or 2.2 percent of national production of 2.93 million, according to the Mexican Automobile Industry Association trade group. Toyota, the world’s largest automaker, sold 60,740 light vehicles for a 5.7 percent market share, trailing Nissan’s 25 percent, GM at 19 percent and Volkswagen’s 15 percent.

“It’s very interesting that Toyota is trying this out in case they decide one day to build a large plant here,” Ricardo Haneine, an auto consultant in Mexico City with A.T. Kearney Inc., said. “They’ll learn more about Mexico from a manufacturing perspective.”

Honda, Mazda taking advantage of opportunities in Mexico

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Honda and Mazda are both expanding their plants in Mexico to capitalize on the benefits of manufacturing in Mexico.

Honda is beginning the manufacture of its new Honda Fit, a high-tech vehicle, at its advanced automobile plant, Honda de Mexico, Sociedad Anonima de Capital Variable. The new plant will improve Honda's ability to supply cars to the U.S., according to Automotive World. More than 90 percent of Honda and Acura cars that go to the U.S. are built in North America and are shipped from Mexico to the U.S.

Honda's new plant will increase Honda's supply to 1.92 million units, accounting for 95 percent of the vehicles shipped to the U.S. The plant is located in Celaya, Guanajuato, and cost $800 million to build. It will employ 3,200 workers and the annual capacity will be 200,000 vehicles and engines.

"Our new plant in Mexico is based on the Honda Company Principle of maintaining a global viewpoint to supply products of the highest quality, yet at a reasonable price, for worldwide customer satisfaction," said Takanobu Ito, president and CEO of Honda. "In Celaya, we can see these core values in action, with a commitment to the highest quality and efficiency and a focus on creating joy for our customers."

Mazda is also expanding

Mazda is building its new plant in Salamanca. It will open Feb. 27 2014. According to Auto News, Mazda is adding the factory in order to benefit from the low-cost production base that comes from manufacturing in Mexico. In the past when Mazda manufactured in Japan, the company was battered by the strong value of the yen, which made exporting expensive. In 2012, the company decided to boost their overseas production in order to protect itself from the expenses associated with rising currencies.

"You might say the yen is weak, so why not keep exporting from Japan? But you can't rely on that foreign exchange rate to keep exporting," says Koji Endo, Auto Analyst at Advance Research Japan. "It makes sense to minimize the risk and minimize the cost by going to Mexico. It's a very strategic plant."

According to Auto News, the vehicles built in Mexico will be cheaper and easier to sell in the U.S. It will produce 230,00 units per year beginning next year.

Both auto companies – Honda and Mazda - are taking advantage of the many benefits that come from expanding to Mexico. Not only is it cheaper to build cars in Mexico, but the supply chain to the U.S. is more efficient and it comes virtually tariff-free.

Mazda stays flexible in Mexico

autonews.com

Lindsay Chappell
Automotive News

February 10, 2014 

 

 

CHICAGO -- Mazda will keep its newly opened North American factory flexible in its mix of Mazda3 and Mazda2 models.

The new plant in Salamanca, Mexico, began producing the Mazda3 in January and is building up inventory. Dealers will begin receiving the cars at the end of this month, says Jim O'Sullivan, CEO of Mazda North American Operations.

But O'Sullivan said the mix between the Mazda3 and the smaller five-door Mazda2, which launches in Salamanca later this year, will be dictated by market demand.

"Because the plant is flexible, if we need to build 100 percent Mazda3s, we'll do it," O'Sullivan said at the Chicago Auto Show. "The split between 2s and 3s will depend on global demand. We'll be supplying Canada, Mexico, Central and South America, and also whatever Europe decides they want to source from us in Mexico."

At full capacity, the factory will be able to produce about 260,000 vehicles a year once a second work shift is added. But approximately 50,000 of those have been promised for a Toyota vehicle that Mazda will begin building in 2016.

The plant will also have flexibility in engine production, building the 2.0-liter and 2.5-liter engines for the two cars. Engine plans are not set in stone, O'Sullivan says. The European market versions of the vehicles use small displacement engines, and Salamanca might source 1.8-liter engines from Japan to supply Europe.

O'Sullivan says the new Mexico plant is important to Mazda's U.S. sales target. The automaker hopes to grow from expected sales volume of about 290,000 in the fiscal year that ends March 31 to about 400,000 sales for the year ending March 31, 2016.

Salamanca will deliver only part of that 100,000-plus sales increase over the next 25 months, he says: "A lot of it will come from other new product initiatives over the next year or two."

Mazda dealers expect Mexico output will help lift Mazda3 sales 20%

Mazda3 U.S. sales declined 15 percent last year to 104,713 unit.

 

Ryan Beene
Automotive News
January 25, 2014 - 1:49 pm ET 

 

 

NEW ORLEANS -- Mazda dealers expect extra production from the company's new plant in Mexico will help boost sales of the Mazda3 compact car about 20 percent.

Inventories of the Mazda3, the brand's top-selling nameplate, have been limited since the redesigned model was introduced last fall. Mazda3 U.S. sales declined 15 percent last year to 104,713 units, but dealers say Mazda's new plant in Salamanca, Mexico, should help boost sales.

"There won't be a product shortage on the 3. We're going to be in good shape because of that Mexico inventory," said Tom Carey, a Mazda dealer in Urbandale, Iowa, and chairman of the brand's national dealer council.

Production of the Mazda3 began this month in Mexico and will supplement Mazda3 production from Japan. The company has not said how many units the Mexico plant will produce in its initial ramp-up year. The Mazda2 will be added to the assembly lines this year.

Rob King, the brand's outgoing dealer council chairman with a Mazda dealership in Winston-Salem, N.C, says the extra output should boost sales about 20 percent, which would be more than 125,000 units. He says Mazda is also "tracking" to exceed 300,000 vehicle sales this year, which Mazda hasn't done since 1994 when sales exceeded 375,000 vehicles.

Mazda officials also reiterated their goal of boosting U.S. sales to more than 400,000 units by 2016.
"We're seeing significant growth," King said. "We feel very good about where we're going."

Mazda begins vehicle production in Mexico

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Many international automakers have a stake in North American markets, resulting in a growing number of manufacturing plants being constructed throughout the U.S., Canada and Mexico. According to the AutoBlog, unstable international currencies and ballooning costs associated with shipping materials overseas has forced automakers to reevaluate the way they produce vehicles. Certainly, consumers aren't going to pay a premium to help car manufacturers recoup the costs of shipping vehicles and demand isn't slackening for vehicles from Asian automakers. Accordingly, Mazda has recently announced it will begin manufacturing the Mazda3 sedan in Mexico.

The primary market will be U.S. consumers but will also expand the vehicle's reach to Europe and other American countries. Meanwhile, the blog suggested the auto manufacturer will likely follow up with the Mazda2. Mazda Motor Manufacturing of Mexico President and CEO Keishi Egawa told Automotive Business Review that the new plant will allow the company to be part of a global market.

"We are committed to continue our efforts to contribute to the growth of Mexico's economy through the production of vehicles and the development of the excellent human resources who support and lead the automobile industry here," Egawa explained.

This project has been in development since 2011 when the company laid the foundation for the plant in Salamanca, a city in the central state of Guanajuato. The region has seen an influx of manufacturing due in large part because of a highly-skilled workforce and welcoming trade arrangements, namely the North American Free Trade Agreement. Mazda expects the manufacturing plant to produce a capacity of 230,000 vehicles annually, which will help the company quickly and efficiently get their cars to market without having to navigate international trade barriers.

With improved flexibility in supply chains afforded by Mexico's close proximity to U.S. and Canadian markets, the automaker will likely have an advantage over competitors located abroad.

Mazda starts production at new plant in Mexico

January 07, 2014

THE ASAHI SHIMBUN

Mazda Motor Corp. announced Jan. 7 that production has begun at its new plant in Mexico, Mazda de Mexico Vehicle Operation (MMVO), located in Salamanca, in the state of Guanajuato.

The first model produced was a Mazda3 sedan (known as Axela in Japan) for the U.S. market.

"We have sent over 150 engineers and supervisors to Mazda's plants in Hiroshima and Hofu, and made every effort to ensure that we are manufacturing products of the highest quality here at MMVO," said Keishi Egawa, Mazda's managing executive officer in charge of New Emerging Market Operation (Latin America) and president and CEO of Mazda Motor Manufacturing de Mexico, S.A. de C.V.

"With the start of mass production, we now have a system capable of offering vehicles of the same high quality as those made in Japan, on a global scale, and that is extremely gratifying. We are committed to continue our efforts to contribute to the growth of Mexico's economy through the production of vehicles and the development of the excellent human resources who support and lead the automobile industry here."

Mazda has sold approximately 180,000 vehicles in Mexico since it entered the market in 2005 and in 2013 sold a record 33,000 units in the country. In addition to the United States, MMVO will produce the Mazda3 for other countries in the Americas and for Europe. Mazda said it intends to strengthen its production system in Mexico and expand the production model line-up to include the Mazda2 (Demio in Japan).

Mazda: To Build Engine Factory In Mexico For $120M

online.wsj.com

By Yoree Koh 
 

TOKYO--Mazda Motor Corp. (7261.TO) said Thursday it will build an engine factory at its new auto plant in Mexico, as Japan's most export-reliant car maker looks to bolster local production to further shield itself from currency fluctuations.

The Hiroshima-based auto maker said it will spend $120 million to build the factory, which is expected to begin operations in October 2014. The factory will build engines that use its Skyactiv technology, Mazda's series of under-the-hood fuel-efficiency improvements, with plans to build 230,000 engines a year. The engines will be installed in the Mazda3 sports compact and Mazda2 subcompact that will be made at the Mexican plant at the same site.

Mazda currently builds Skyactiv engines in Japan and China.

The Mexican plant is the latest attempt by Mazda to diversify a production base that has been largely confined to Japan. Because it exports about 80% of its what it makes at home--the highest proportion of any of domestic auto maker--Mazda was especially hurt by the yen's strong spell, suffering four consecutive years of losses through March 2012.

The yen's dramatic fall since late 2012 has been a boon to the company's bottom line. In the April-June quarter, Mazda swung back into the black to post a net profit of Y5.46 billion while operating profit increased 20-fold to Y36.52 billion, lifted by strong sales and on the back of the weaker yen.