Mazda, the fifth-largest Japanese automaker, announced earlier this year that it was starting construction on a plant in Guanajuato, a city 230 miles Northwest of Mexico City. The plant is slated to build the next-generation Mazda 2 and 3 compact models for the North, Central and South American markets. In an indication of the company's confidence of its growth prospects in the Western Hemisphere, Mazda has announced additional investment in plant capacity, according to Reuters.
An additional $150 million is being invested on top of the previously-announced $500 million. The plant is expected to be on-line in first quarter of 2014, with an initial capacity of 140,000 vehicles a year. The added investment will give the plant a capacity of 230,000 a year by end of the fiscal year ending March 2016. The plant will also produce as many as 50,000 Toyota subcompact models in an agreement reached with the auto giant. Toyota will contribute to equipment and costs related to building its model at the plant.
Of the Japanese automakers, Mazda is currently most-reliant on Japan-built models for its U.S. sales, having ceased production of the 6 midsize sedan at the Flat Rock, Michigan assembly plant. The all-new 2014 Mazda 6 is built in Japan, a relative rarity in the midsize segment, as nearly all of its Japanese-branded rivals are built in the U.S. This reliance on Japan-built models has left the company vulnerable in the face of currency fluctuations of the Yen, affecting profits.