Mazda Is Going To Siberia
Last January, we reported that Mazda wants to go to Siberia, and this seems where they are headed. Mazda said in a statement today that it has agreed to a joint venture with Russian carmaker Sollers. It will produce Mazda cars in Vladivostok for the promising Russian market.
“Several Mazda nameplates” are planed to e produced for the Russian market. Russia is widely believed to be the only market in Europe that promises growth. Mazda sold approximately 28,000 units during the period from January through September 2011, a year-on-year increase of approximately 77 percent.
Mazda builds most of its cars in Japan. Of the Japanese carmakers, Mazda is believed to have the highest exposure to the soaring yen. Vladivostok is a logical choice, it is Russia’s closest port to Japan. Using the Trans-Siberian railroad, cars can be bought anywhere in Russia.
Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.
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Vladivostok is not in Siberia, it's located at the southermost tip of Russian Far East. The difference is quite stark: there aren't any tigers and bamboo in Siberia, while in the Far East there are!
Check your maps. Just as easy to ship from, and support the plants in Vlad as Japan. If they can build high quality cars it is a smart move. Plus they are ready for that huge N Korea market. :-)
We're clearly seeing a pattern here with Mazda. Build smaller factories closer to the point of sale. Mazda's other most recent expansion has been in Vietnam. A small emerging market that is becoming increasingly protective to importing cars from other emerging markets such as Thailand and China. The Vietnamese factory has a max capacity of 10k year, but Mazda only plans of making 2000-3000 cars annually. It is by any definition a mini-factory. Building domestically to where they plan on selling it avoids any political and bureaucratic backlash of importing cars as it creates local jobs- it taps into the local nationalist sentiment. Also they diversify their supply chain (to avoid tragic disruptions like floods and earthquakes). This factory in Vladivostok will be thrice the size of the Vietnamese plant with 30k maximum production capacity. But its still a very small plant. Most of those cars will likely be aimed at the Russian market, but Vladivostok being a huge port city means that Mazda can export them if they want to. Mazda's recent moves have been in making smaller factories in emerging markets (Vietnam, Russia) and building much larger hub-based factories in other core markets (Thailand, Mexico, China) which would be able to supply the smaller factories with crucial parts. Brazil and Indonesia will probably be next for Mazda.
Doesn't Mazda have the reputation for rust? Sounds like fun in Russia!