Yamanouchi: Mazda's Mexico Factory Key To Global Strategy

Mazda Chairman Takashi Yamanouchi opened his company’s sole North American factory in Salamanca, Mexico, proclaiming the new factory the key to a global strategy “upon which the very future of [the] company hinges.”

Automotive News reports the strategy with the factory — Mazda’s Structural Reform Plan — follows a three-pronged approach: a hedge against currency exchange disruptions, provide Mazda with a low-cost manufacturing base, and give the automaker access to new markets. The factory’s location allows the automaker to gain more profit for the Mazda3s destined for the United States, than those exported from Japan, while also providing an export base to Europe and access to new markets in Latin America. In turn, Mazda’s new access through Mexico’s free trade pacts provides to markers worth a combined 35 million to 40 million vehicle sales annually.

Though the yen is weakening against the dollar at the moment, Yamanouchi said the factory will act as a hedge against unpredictable currency fluctuations that could bring down profits for his company at any time:

When the yen becomes stronger, we have the Mexican plant, therefore we will never again go into the lost position. But when the yen gets weaker, we will further cost reduce the Mexican plants so it will contribute to our total profitability. Our philosophy is that we will strike the balance of business so that we won’t go into the very difficult times of the past that we have experienced. Never.

The factory is expected to employ 4,600 workers once at full capacity of 230,000 units/annually. Currently, 3,000 employees assemble Mazda3s for the North American market, which will be joined by the Mazda2 and a Mazda2-based vehicle for Toyota. An engine machining plant will also set up shop in the factory by October 2014.