The Salamanca (Mexico) plant will be Mazda's only North American production site when production starts this week (27 February). The plant will provide the company with a lower-cost production base, and favourable trade agreements across the region and to Europe. According to an Automotive News report, output began in January 2014 and will ramp up to a capacity of 140,000 units per annum (upa) by April, expanding to 230,000 units next year with the addition of the Mazda2 and production of a Toyota small car. Toyota and Mazda have worked out an arrangement for Mazda to build 50,000 units of a Toyota-branded car there as well, thus easing costs for both companies, while enabling Mazda to learn more about Toyota's production practices. Mazda CEO Masamichi Kogai said, "This will be purely incremental overseas volume. So, as a result, the overseas production ratio will increase accordingly." The flexible plant will be able to adjust its mix of Mazda2 and Mazda3 to match global demand, Jim O'Sullivan, CEO of Mazda North American Operations, told the newspaper. The arrangement is similar to that at its assembly plant at Hofu (Japan), which builds the CX-5, Mazda3, and Mazda6. Mazda credits this flexibility to the Skyactiv portfolio of vehicle frame, chassis, and powertrain technologies, which can be scaled up or down to support a subcompact car, midsize CUV or anything in between.
Significance: This plant will provide what Mazda needs: a low-cost production facility with favourable trade agreements that could help to insulate the company from a fluctuating yen. IHS Automotive forecasts that the CX-5 will join the production line in Salamanca in 2017, and that output will increase to 345,000 units in 2020, by which time Mazda is forecast to increase global CBU production to 1.6 million from 1.25 million in 2014. The company's CKD production will be about 60,000 units in 2014, and is expected to double to 113,000 units in 2020. The output of the Salamanca plant will ultimately rival that of the key Hofu plant, which is forecast to produce 388,000 units in 2014 and 404,000 in 2020.
