Mazda to move its production offshore

Article by Christian Andrei, on August 29, 2010

For various reasons, foremost of which is the dollar-yen exchange rate, Mazda Motor Corp. is considering transferring more of its manufacturing base offshore.

Mazda CEO Takashi Yamanouchi said that this move would better protect the company against currency swings. Since the dollar has continued to weaken against the yen, Mazda's fortunes in dollar-denominated markets are suffering. So far, Mazda has made no decisions.

Yamanouchi hesitated to give further details, citing the quiet period before Mazda's $1.1 billion public stock offering. The money that it expects to raise will be used for hybrid and fuel economy r&d.

Yamanouchi said that Mazda would have to consider its first priority, which is to streamline its domestic cost structure. He wasn't that keen on the option of adding a new factory in the United States beyond the plant in Flat Rock, Mich. , currently shared with Ford Motor Co.

That factory produces the Mazda6 and the Ford Mustang. He clarified that the exchange rate is not the only reason for an offshore plant. He said that the U.S. market is very bad and that Mazda is 'not likely to achieve that kind of volume in North America' to warrant an additional factory.

To warrant retooling, he requires a volume of 100,000 units before he would consider moving a vehicle into an overseas plant.

Topics: mazda, production

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