Mustang In "Misery" As Mazda Goes Mexican

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.