Euro Auto Trends

Mazda2 Stops at Valencia

Posted in Market Trends by jonas on the December 4th, 2006

Japan’s Mazda Motor Corp. said on Friday it would stop making the Mazda2 subcompact at Ford Motor Co.’s factory in Spain when it launches a new B-segment car next year, and instead consolidate production in Japan.

Mazda, held one-third by Ford, built 36,000 units of the Mazda2/Demio car at the Valencia plant in 2005, accounting for 9 percent of the 400,000-unit-a-year factory.

Ford of Europe spokesman Todd Nissen said the auto maker would ramp up production of existing models to make up the difference, adding that Mazda’s output had fallen to about 7 percent of the total this year.

Mazda said the relocation to its Ujina plant in Hiroshima was aimed at maximising efficiencies through economies of scale by lumping together production of its B-segment subcompact cars.

The yen’s current weakness against the euro would also help boost profits, although analysts say Mazda, which exports most of its cars it sells overseas from Japan, needs to eventually reduce its currency exposure by building more vehicles abroad.

The Ujina plant is now working at 87 percent of its capacity of 504,000 units a year, leaving room for roughly 65,000 units. Last year, the factory built 72,000 Mazda2 cars.

Production of the Mazda2 at the Valencia site, which also makes the Ford Focus, Fiesta and Ka models, began in 2003.

With global sales volume growing rapidly, Mazda is looking for ways to boost output capacity from the current 1.45 million units a year. Mazda has said it would outline such steps as part of a new mid-term business plan to be announced next spring.

By Reuters

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