Mazda heads to Mexico to fight Strong YEN
11-14-2011, 05:58 PM
#1
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Mazda heads to Mexico to fight Strong YEN
TOKYO -- Mazda Motor Corp., which exports 80 percent of its Japan-made vehicles, is racing to overhaul its money-losing North American manufacturing operation to offset the profit-eating effects of a strong yen. But its Michigan assembly plant isn't part of the revival plan.
Instead, CEO Takashi Yamanouchi wants to start exporting Mazda2 and Mazda3 small cars to the United States from a factory planned for Mexico as early as 2014.
Those shipments should displace cars imported from Japan, thus relieving Mazda of exchange rate losses and giving it lower costs and cheaper labor than back home.
"If the yen continues its appreciation, then we can ship products from Mexico" to the United States, Yamanouchi told Automotive News on Nov. 7. "The plant is to open in 2013, so by 2014 -- if all goes successfully -- it will contribute to some volume. We are still studying how to do that.
"With the yen at historic highs, we have to do something," he said, speaking through an interpreter.
Hitting the target
But if Mazda is unable to ramp up shipments from Mexico by 2015, the automaker would still be battling the strong yen and might miss its U.S. sales target for that year of 400,000 units, Yamanouchi warned. So a quick ramp-up is critical.
"If we can do that [import from Mexico], we don't want to change the original target," he said.
Mazda is trying to line up local suppliers so vehicles built there will meet the North American Free Trade Agreement's local-content requirements for barrier-free trade among the United States, Canada and Mexico. Mazda likely will tap Japanese suppliers that already are in Mexico servicing Nissan Motor Co.'s extensive operations there, and bring some of its own from Hiroshima, Yamanouchi said.
Countermeasures do not include keeping a Mazda model in production at AutoAlliance International Inc., the assembly plant in Flat Rock, Mich., that it owns jointly with Ford Motor Co. That plant has been Mazda's sole North American manufacturing outpost since 1985.
In June, Mazda said it will stop building the Mazda6 sedan there after the current generation ends its run sometime next year.
"When that product is gone, for the time being there won't be any products in the Michigan plant. How we use that capacity afterward is something we need to discuss with Ford," Yamanouchi said. "We don't have any intent to dissolve the joint venture at this point."
Yamanouchi declined to say when a decision would be made.
But it is not unprecedented to have one partner take a breather at AutoAlliance. The plant was building only Mazda products for a period before the Ford Mustang was added in late 2004.
More exposed
Mazda is more exposed to losses from volatile exchange rates than many of its Japanese rivals because of its high ratio of exports from Japan. But Yamanouchi doesn't see that changing.
To save Japanese jobs, he wants to keep Japanese output at the current level of 900,000 units a year, just a hair below its domestic straight-time capacity of 1 million vehicles.
"That's a commitment we have to the local communities," he said.
Yamanouchi's strategy will depend on pushing aggressively into emerging markets in which Mazda has lagged behind bigger global players. He wants to put more plants in emerging markets, source more parts from those regions and boost sales in those markets.
The Mexico plant originally was planned as a base for exporting to Brazil, among other Latin American markets. Mazda recently expanded capacity at its plant in Nanjing, China, and has begun assembling cars from knockdown kits in Malaysia and Vietnam.
It is also looking at production in Russia. And Mazda aims to buy more parts from low-cost countries.
It currently imports about 20 percent of the parts that go into its Japan-made vehicles. Yamanouchi forecasts that the ratio of imported parts can be lifted to 30 percent. Going above that is unlikely, he says, because importing bulky parts is too expensive.
"Right now we are working hard to reach that level," he said. "Reaching that is part of the plan by March 2016, and of course we need to pull ahead that target."
Read more: http://www.autonews.com/apps/pbcs.dl...#ixzz1dj8JEdj6
Instead, CEO Takashi Yamanouchi wants to start exporting Mazda2 and Mazda3 small cars to the United States from a factory planned for Mexico as early as 2014.
Those shipments should displace cars imported from Japan, thus relieving Mazda of exchange rate losses and giving it lower costs and cheaper labor than back home.
"If the yen continues its appreciation, then we can ship products from Mexico" to the United States, Yamanouchi told Automotive News on Nov. 7. "The plant is to open in 2013, so by 2014 -- if all goes successfully -- it will contribute to some volume. We are still studying how to do that.
"With the yen at historic highs, we have to do something," he said, speaking through an interpreter.
Hitting the target
But if Mazda is unable to ramp up shipments from Mexico by 2015, the automaker would still be battling the strong yen and might miss its U.S. sales target for that year of 400,000 units, Yamanouchi warned. So a quick ramp-up is critical.
"If we can do that [import from Mexico], we don't want to change the original target," he said.
Mazda is trying to line up local suppliers so vehicles built there will meet the North American Free Trade Agreement's local-content requirements for barrier-free trade among the United States, Canada and Mexico. Mazda likely will tap Japanese suppliers that already are in Mexico servicing Nissan Motor Co.'s extensive operations there, and bring some of its own from Hiroshima, Yamanouchi said.
Countermeasures do not include keeping a Mazda model in production at AutoAlliance International Inc., the assembly plant in Flat Rock, Mich., that it owns jointly with Ford Motor Co. That plant has been Mazda's sole North American manufacturing outpost since 1985.
In June, Mazda said it will stop building the Mazda6 sedan there after the current generation ends its run sometime next year.
"When that product is gone, for the time being there won't be any products in the Michigan plant. How we use that capacity afterward is something we need to discuss with Ford," Yamanouchi said. "We don't have any intent to dissolve the joint venture at this point."
Yamanouchi declined to say when a decision would be made.
But it is not unprecedented to have one partner take a breather at AutoAlliance. The plant was building only Mazda products for a period before the Ford Mustang was added in late 2004.
More exposed
Mazda is more exposed to losses from volatile exchange rates than many of its Japanese rivals because of its high ratio of exports from Japan. But Yamanouchi doesn't see that changing.
To save Japanese jobs, he wants to keep Japanese output at the current level of 900,000 units a year, just a hair below its domestic straight-time capacity of 1 million vehicles.
"That's a commitment we have to the local communities," he said.
Yamanouchi's strategy will depend on pushing aggressively into emerging markets in which Mazda has lagged behind bigger global players. He wants to put more plants in emerging markets, source more parts from those regions and boost sales in those markets.
The Mexico plant originally was planned as a base for exporting to Brazil, among other Latin American markets. Mazda recently expanded capacity at its plant in Nanjing, China, and has begun assembling cars from knockdown kits in Malaysia and Vietnam.
It is also looking at production in Russia. And Mazda aims to buy more parts from low-cost countries.
It currently imports about 20 percent of the parts that go into its Japan-made vehicles. Yamanouchi forecasts that the ratio of imported parts can be lifted to 30 percent. Going above that is unlikely, he says, because importing bulky parts is too expensive.
"Right now we are working hard to reach that level," he said. "Reaching that is part of the plan by March 2016, and of course we need to pull ahead that target."
Read more: http://www.autonews.com/apps/pbcs.dl...#ixzz1dj8JEdj6
11-14-2011, 06:03 PM
#2
Super Moderator
Thread Starter
And on the ROTARY FUTURE?..the Boss says...
What are you plans for a next-generation rotary engine?
We will discontinue domestic sales of the current RX-8 using the rotary engine next June and that will bring an end to its global sales.
Eventually, when an engine with better fuel economy and more powerful low-end torque is developed, it has a possibility of being resurrected.
Another route to its survival would be using it as a range-extender [in an electric vehicle].
Why use a rotary engine for a range extender?
If the engine is operating at a certain rpm and under certain conditions, the rotary offers far better fuel efficiency than a regular gasoline engine.
Read more: http://www.autonews.com/apps/pbcs.dl...#ixzz1djAnQ7wm
We will discontinue domestic sales of the current RX-8 using the rotary engine next June and that will bring an end to its global sales.
Eventually, when an engine with better fuel economy and more powerful low-end torque is developed, it has a possibility of being resurrected.
Another route to its survival would be using it as a range-extender [in an electric vehicle].
Why use a rotary engine for a range extender?
If the engine is operating at a certain rpm and under certain conditions, the rotary offers far better fuel efficiency than a regular gasoline engine.
Read more: http://www.autonews.com/apps/pbcs.dl...#ixzz1djAnQ7wm
11-15-2011, 02:59 AM
#5
Super Moderator
Thread Starter
Possibility is not great odds....anyone want to make a bet?
11-15-2011, 03:03 AM
#6
Super Moderator
Thread Starter
11-15-2011, 08:57 AM
#7
I'm willing to take the bet.
I will state my guess as this: The MX-5 will be here in 2013 as a 2014 car and the new rotary car the following year. I think they're getting closer to success with their new engine than he can divulge at this time.
Also the new 3 will drop in 2013 (US model year 2014) too. I can't wait.
Paul.
I will state my guess as this: The MX-5 will be here in 2013 as a 2014 car and the new rotary car the following year. I think they're getting closer to success with their new engine than he can divulge at this time.
Also the new 3 will drop in 2013 (US model year 2014) too. I can't wait.
Paul.
11-15-2011, 11:00 AM
#8
Super Moderator
Thread Starter
I'm willing to take the bet.
I will state my guess as this: The MX-5 will be here in 2013 as a 2014 car and the new rotary car the following year. I think they're getting closer to success with their new engine than he can divulge at this time.
Also the new 3 will drop in 2013 (US model year 2014) too. I can't wait.
Paul.
I will state my guess as this: The MX-5 will be here in 2013 as a 2014 car and the new rotary car the following year. I think they're getting closer to success with their new engine than he can divulge at this time.
Also the new 3 will drop in 2013 (US model year 2014) too. I can't wait.
Paul.
Well I hope so, but IMO if they can't get a REAL 25% increase in Fuel Economy it just won't happen...I am talking as a main and ONLY power plant.
I really can't believe how anyone would want a Hybrid Rotary.
All new Mazda 6 SA starts production in April next year for a 2013MY.
All new SA ND MX-5 starts production in August next year for a 2013MY.
Both the 5 and 6 sales have sunk badly, Mazda have to bring this forward and fast.
Might see a final SE on the MX-5, but I somehow doubt it.
Cant see anything Rotary for at least 5 years...if ever.
11-15-2011, 11:59 AM
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But if Mazda is unable to ramp up shipments from Mexico by 2015, the automaker would still be battling the strong yen and might miss its U.S. sales target for that year of 400,000 units, Yamanouchi warned. So a quick ramp-up is critical.
11-25-2011, 02:18 PM
#10
Super Moderator
Thread Starter
All to do with Free Trade Agreements.
Quote...
MAZDA MANUFACTURING IN MEXICO
Japanese automakers are getting hammered by the strong yen, so they’re moving production out of Japan to low-cost countries. Mazda’s CEO, Takashi Yamanouchi, says they’re moving to Mexico because it has so many free-trade agreements. Mazda decided not to go to Brazil, which has one of the fastest growing car markets in the world, because Brazil’s free-trade agreements only reach 6 million car buyers. Mexico’s free-trade agreements reach 40 million car buyers which is about the size of North America, South America and Europe combined. As you know, Mazda is abandoning its plant in the United States because the U.S. only has free-trade agreements with 17 countries, while Mexico has FTAs with 41 countries
.................................................. .................................................. ..
This is one thing I just don't get how the "markets" particularly Japan have allowed their strong Yen to virtually kill off their manufacturing base ....for nearly 2 decades now....20 years!!!
WHY!!!....I just don't get it....you have high unemployment, Japanese manufacturers going off shore for decades now, Japanese citizens who can't find work, but their currency maintains it's strong value...????
One would have thought the TOTAL devastation of this years Tsunami and Earthquake would have damaged (lowered) their currency, but NO, it strengthened it!..FFS!!...
Local investors started to take their money from offshore and put it back into Japan after the disaster!, strengthening their Yen..yet again.
How can this help?..all it does is make it even harder for exports of any kind for all Japanese manufacturers.
They also have next to zero interest rates, has been that way for almost 20 years.
Soon Japan will manufacture next to nothing in their homeland...
Government policies look as if they want no manufacturing or jobs, so just WHAT do their citizens do.
So over the decades, USA, Japan, UK, Australia have exported jobs to third world countries...so the end game is???...eventually some sort of equilibrium throughout the world...less than 0000.1% of the population being mega rich and the rest in poverty?
I JUST Don't get it.
Can some one PLEASE EXPLAIN?
MAZDA MANUFACTURING IN MEXICO
Japanese automakers are getting hammered by the strong yen, so they’re moving production out of Japan to low-cost countries. Mazda’s CEO, Takashi Yamanouchi, says they’re moving to Mexico because it has so many free-trade agreements. Mazda decided not to go to Brazil, which has one of the fastest growing car markets in the world, because Brazil’s free-trade agreements only reach 6 million car buyers. Mexico’s free-trade agreements reach 40 million car buyers which is about the size of North America, South America and Europe combined. As you know, Mazda is abandoning its plant in the United States because the U.S. only has free-trade agreements with 17 countries, while Mexico has FTAs with 41 countries
.................................................. .................................................. ..
This is one thing I just don't get how the "markets" particularly Japan have allowed their strong Yen to virtually kill off their manufacturing base ....for nearly 2 decades now....20 years!!!
WHY!!!....I just don't get it....you have high unemployment, Japanese manufacturers going off shore for decades now, Japanese citizens who can't find work, but their currency maintains it's strong value...????
One would have thought the TOTAL devastation of this years Tsunami and Earthquake would have damaged (lowered) their currency, but NO, it strengthened it!..FFS!!...
Local investors started to take their money from offshore and put it back into Japan after the disaster!, strengthening their Yen..yet again.
How can this help?..all it does is make it even harder for exports of any kind for all Japanese manufacturers.
They also have next to zero interest rates, has been that way for almost 20 years.
Soon Japan will manufacture next to nothing in their homeland...
Government policies look as if they want no manufacturing or jobs, so just WHAT do their citizens do.
So over the decades, USA, Japan, UK, Australia have exported jobs to third world countries...so the end game is???...eventually some sort of equilibrium throughout the world...less than 0000.1% of the population being mega rich and the rest in poverty?
I JUST Don't get it.
Can some one PLEASE EXPLAIN?
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