By on June 16, 2011

Mazda has confirmed [to Reuters via Automotive News [sub]] what has been rumored for a while (especially in the Mexican media): open a new plant in Guanajuato, Mexico, near VW and GM’s Silao facilities. Production starts this fall and the line starts rolling in 2013, according to “people familiar with the matter.” In the meantime, Mazda6 production at the Flat Rock, MI joint venture plant continues until mid-2012, at which point Mazda will make a decision that it’s still “studying,” but it won’t be building the Mazda6. Interestingly, Mazda’s new Mexican plant is only being built for “at least” 50k units of

compact cars, initially for sale in Mexico and South America, and eventually export to North America.

Could the next-generation of Mazda midsizers be hecho en Mexico as well? It’s possible, but we won’t know until Mazda announces more details about the new factory. Meanwhile, nobody’s expecting Mazda to hang around Flat Rock… least of all Ford.

A separate AN [sub] piece gives J.D. Power analyst Jeff Schuster a chance to sum up the Mustang’s “misery,” and he spells out the situation in Flat Rock succinctly:

The Mustang on its current sales pace isn’t enough to sustain Flat Rock. The Camaro has a more modern feel and seems to draw more attention from a younger age group. Even with a boost from a redesign, because of what Camaro has achieved, you’re still looking at sales volume for the Mustang below 100,000 a year. The bottom line is something at Flat Rock will have to change.

The math goes something like this: Flat Rock can build 240k units. Last year the Mustang sold 73,716 units and the Mazda6 sold 35,662. This is why Mazda is (likely) going to leave, and it’s why Ford needs to completely re-think the plant. The Mustang isn’t getting a redesign until 2014, and if the Camaro doesn’t crash out (and it’s shown few signs of faltering this year) it will likely lose volume every year until then. Throw some rejuvenated competition from Hyundai’s Genesis Coupe, and Mustang’s chances of ever sustaining much better than 100k units seems unlikely.

The plant’s flexibility is cited as a key benefit, but unless Mazda is incredibly confident in its next-gen “Mazda-rati” midsizer, it’s hard to see the plucky automaker committing to over 100k annual units at a UAW plant any time soon. I’m guessing that this new Mexican plant site includes plenty of room to grow… and since Ford’s made big profits thanks in large part to its Mexican manufacturing footprint, they might not be far behind.

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33 Comments on “Mustang In “Misery” As Mazda Goes Mexican...”


  • avatar
    dwford

    I don’t see how Ford doesn’t create at least one Lincoln off the 2014 Mustang chassis. The next Mustang will also be a “world” car, so expect some good export volume.

    • 0 avatar
      th009

      The MKS would add a whopping 10K units per year. And it’s unlikely that a RWD Lincoln would be built on the current Mustang platform. Maybe on a next-gen platform with IRS?

      But even if you sold 2x MKS volume with RWD, and added 50% to Mustang volume thanks to exports, the plant would still be running at only half volume. And that Mustang redesign is three years away.

      • 0 avatar
        Scoutdude

        The 2014 Mustang is likely only 18 months away. The likely canidate to go on that platform would be a new Mark 2dr which is badly needed not another 4dr sedan which Lincoln already has enough of.

    • 0 avatar
      Z71_Silvy

      Ford could create a MKMustang…but it would be a dismal failure just like the other rebadged Fords Lincoln sells.

      A Mustang with an even more inflated MSRP? That would sell worse than the MKFlex.

      • 0 avatar
        John Horner

        Some people can always be counted of for a bit of Ford hatred.

      • 0 avatar
        tekdemon

        I think it could do OK if it was significantly more than a simple rebadge-an upgraded suspension (including a reliable IRS) for more of a luxury sports sedan feel would be a must for the kind of money they’d be charging. Dumping the solid rear axle would make sense since nobody buys luxury sedans so they can make 800HP at the track so nobody will care that an IRS can’t handle as much power or whatever.

    • 0 avatar
      Greg Locock

      “The next Mustang will also be a “world” car, so expect some good export volume.”

      O RLY, as the young people say.

  • avatar
    brettc

    Maybe they should start assembling the Probe again at Flat Rock. That’ll fix it.

    And if Mazda moves production to Mexico, what’s the chance their cars won’t rust after 2 years? I cannot believe how many newish Mazdas I see with big bubbles of rust on them.

    • 0 avatar
      highdesertcat

      Still, I wish more foreign manufacturers in the US would pack up their plants and move them to Mexico. That sure would cut down on the backbiting by the UAW and foreign-bashers about foreigner plants in America. NAFTA works great for exactly this scenario, like it does with Canada, AND more Mexicans will have jobs in their own country instead of coming over here illegally.

  • avatar
    Conslaw

    They should at least build the Fusion and MKZ hybrids at Flat Rock.

    I read that 40,000 Mexicans have been killed in 6 years in their drug wars. What a great place to do business.

  • avatar

    That’s correct,
    Not a good place if you’re on the drug business… they are killing between themselves mostly.
    So far Chrysler, GM, Ford, Nissault, VW and many truck brands are doing business and big business so far.
    Saludos from Northern Mexico.

    • 0 avatar
      Dynamic88

      NAFTA is really working for us isn’t it?

      • 0 avatar
        rnc

        Unions* unwilling to accept that the world had changed is whats working against us (think shipbuilding, steel, tires, cars, etc. They made a decision to sacrifice thier future, for a short term gain (i.e. boeings unions deciding not to take a no strike clause cost the union how many new employees and the area in which they live how much additional tax? It’s not like boeing said take a 50% paycut, all they wanted was a guarentee that the unions wouldn’t damage the future of the company by striking and making ridiculas demands as the 787 begins production)**. Americans made the decision long before NAFTA that they weren’t going to buy american made crap just to support someone else’s overcompensation.

        *Government policy beginning with the Gipper to turn us into a financial state, were the wealth was allowed to be concentrated into the few while the others provided services to said wasn’t such a great idea either.***

        **What do you think the end result of that simple vote will be now? As each unionized employee retires a new one will be hired in SC and the facility there will be enlarged and enlarged as more and more of the suppliers locate there, until it reaches the tipping point, they will get thier $100k parting gift and then what?, a simple vote that didn’t really take anything away, disputes would have been decided by mediators, have killed thier childrens future and thier community.

        ***The send jobs overseas started as part of stupid cold war posturing, along with a strong $ is a strong country, that same attitude is what doomed england (as a manufacturing country) and we’re just right behind

  • avatar
    mtymsi

    Given the labor cost difference it’s pretty obvious why Ford builds the Fusion/MKZ & Fiesta in Mexico. It’s just a matter of how much production domestic manufacturers can build in Mexico before running into stiff UAW opposition.

    Funny thing about it though is Hyundai/Kia, Nissan, Toyota & Honda all have a lot more production capacity in the U.S. then they do in Mexico. I know the obvious answer is they aren’t unionized but reportedly they pay as much or in some cases (Toyota) more than UAW Tier One rates.

    • 0 avatar
      George B

      Non-union workers cost less in benefits than union workers. My cynical view is it’s easier to hide graft in union managed defined benefit pension plans and generous health insurance plans than in higher salaries with workers contributing to worker owned 401(k) plans and health savings accounts.

      I like both the Mazda6 and the Ford Mustang, but those sales numbers are too low to sustain moderate cost cars. Need either high unit profit like a luxury car or high volume similar to other 2nd tier intermediates like the Malibu and Fusion to develop the next model.

  • avatar
    Demetri

    It was announced last week that the next US Mazda 6 is going to be built in Japan along with the international models. See here:

    http://www.mazdainthenews.com/next-mazda6-to-be-built-in-japan/#more-767

  • avatar
    L'avventura

    The obvious direction would be that Ford would built the CD3 vehicle like the Fusion in Flat Rock, as the Fusion and Mazda 6 share the CD3 platform and would require minimal retooling to get shift Mazda 6 to Fusion production.

    Right now, the Ford Fusion is built in Sonora Mexico, as well as its other CD3 brethren. Being that Ford would do poorly to waste unused capacity, the likely move would be to move a CD3 platform vehicle back to Michigan.

    The question shouldn’t be about Mustang’s room for growth rather if sales can be added to CD3 platform vehicles like the Fusion/MKZ/Edge where current Mazda 6 capacity can easily be retooled for.

    • 0 avatar
      NulloModo

      The Edge is built in Canada. The Fusion and MKZ are both set to move to EUCD2 (or CD4 depending on what you want to call the platform) for 2013, but as far as I know production is supposed to stay in Mexico.

      There are plans to eventually move Transit Connect production to the US, so Flat Rock could probably be set up for that. Chicago assembly is also pretty packed now running the Taurus, MKS, and Explorer. While MKS volume is low and Taurus sales numbers are moderate, the Explorer has taken off like a bat out of hell. The Police Interceptor variants of the Taurus and Explorer are about to hit, which could increase volume, so maybe offloading one of those lines to Flat Rock would make sense.

      • 0 avatar
        PaulieWalnut

        If the production re-alighnment plans in Ford Europe are anything to go by, the next gen Transit Connect will be built along side the Escape.

        Hermosillo, where the Fusion and MKZ are built is pretty much running flat out. If Ford want to continue to grow in the midsize segment, Flat Rock would seem like a sensible place to add capacity.

  • avatar
    detlump

    Why does the Mustang have to be built in Flat Rock? What about Wayne, if it is so flexible? Ford must have some other plants that could take the production of Mustang. Chicago? Bueller?

  • avatar
    detlump

    And I might add that I am on my second Flat Rock Mustang, first was an 08 GT convertible (no problems in 2 years – lease) and second is a 2010 GT hardtop manual (no problems so far). Yes, I know it doesn’t have the 5.0, but it was such a deal I could not pass it up. And I like the Kona blue/light grey cloth interior very much.

  • avatar
    obbop

    Love it or leave it.

    Interpret that as desired.

  • avatar
    John Horner

    Maybe a Ranger replacement could be built using some of the Mustang’s bones. There really is a need for a competent compact pickup truck.

    • 0 avatar
      DenverMike

      The Mexican Ranger is about $22,500 for a 2WD XLT CrewCab with the 143 HP 2.3 & 5 speed manual. There’s no 4X4 or V6 option, apparently. Should be eligible for import, I think. NAFTA?

      http://mx.autocosmos.yahoo.net/autos/catalogo/ford/ranger.aspx

      • 0 avatar
        CJinSD

        Based on Fiesta pricing, it looks like the prices are 15% over US equivalents(VAT?). That would put the base ranger at $19,565, which would be reasonably attractive. Whether or not it is eligible for import, or easily certifiable, would be dictated by crash standards. Dodge had a Mexico-only Ramcharger 15 years ago that wasn’t built to any standards at all, IIRC.

      • 0 avatar
        DenverMike

        The base Mexican Ranger is $16,363 and looks like it shares its gringo cousin’s body work except for reskinned doors and refreshed front clip so crash ratings should be the same.

        http://mx.autocosmos.yahoo.net/autos/catalogo/ford/ranger/xl-chasis/2011.aspx

      • 0 avatar
        Banger

        I wouldn’t mind seeing the Ranger imported from Mexico. I’d much rather they build it in St. Paul, but hey, any Ranger is better than no Ranger whatsoever.

        Of course, if I had my druthers, I’d like to see the T6 “global” Ranger built in America for U.S. sale. But that’ll probably never happen, so long as Ford is preoccupied with protecting big brother F-150′s “Best-Selling Truck in America 37+ Years Running” advertising tagline. In the face of ever-climbing fuel prices. Because that’s obviously a smart business move, trying to force average “homeowner” truck buyers into something they don’t need 95% of the time and something they can’t afford to fill up 50% of the time.

  • avatar
    ciddyguy

    Seemed to me that the Mustang (2010 on) seem to be selling enough here in Seattle/Bellevue area to be seen on a fairly regular basis but I don’t think I’ve seen as many of the current Camaro as I have the ‘Stangs and Challengers, but the ‘stang seems to win this battle so far.

    Or is the Pac NW just an anomaly?

  • avatar
    Advance_92

    In Chicago I see almost no Camaros or Challengers, and only a handful of Mustangs. It’s probably a regional (urban?) thing.

  • avatar
    panzerfaust

    The Mustang has had the Ponycar market to itself for quite a while, so its not surprising that a repristinated Camaro is doing well, but those sales will taper off a bit once the market gets saturated, which I think is the issue with the Mustang, this basic model has been on the street for 6 years. It should have had a bigger refresh two years earlier. I think all Ford would need to do to pick up some extra production is to stretch the Mustang platform a bit and build a RWD two-door hardtop with more interior room than the Taurus and give it every drive train option that the Mustang has. Give Roush-Fenway some sponsorship and I bet you’d sell 100,000 units.


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