Mazda opens new assembly site in Salamanca, Mexico

Article by Eugene Conan, on March 5, 2014

Mazda Motor Corp. Chairman Takashi Yamanouchi graced the opening of its new Salamanca small-car assembly site in Mexico, dubbing the plant as its "most important global strategic base." The site, which will ramp up to annual production capacity of 230,000 vehicles, is considered as a vital part of the structural reform plan "upon which the very future of company hinges."

Yamanouchi approved the site in 2011 when he was still president of Mazda and was concocting a turnaround following years of losses. One of its key pillars was expanding Mazda’s overseas production capacity with new assembly operations like the Salamanca site.

Mazda is trying to achieve a three-fold goal: build a low-cost production base; hedge against rough foreign exchange swings that hurts Japanese exports; and tap new markets. The Salamanca plant allows the carmaker to achieve all fronts.

The site’s lower labor costs and supplier network initially will produce Mazda3s for the United States that would yield larger profit margins than those built in Japan. The site also gives Mazda an export base to Europe and untapped markets in Latin America.

"Mazda's Structural Reform Plan, upon which the very future of the company hinges, positions this plant as our most important global strategic base," Yamanouchi said, referring to the site, which is the carmaker's only assembly site in North America. 

The site also marks the first time that Mazda didn’t partner with another auto company for an overseas factory since it built a plant in Flat Rock, Michigan, almost three decades ago. While Ford later joined Mazda as a partner at Flat Rock, Mazda stopped production there in 2012.

Topics: mazda, mexico, plant

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