Mazda 2011 Annual Report Download - page 23

Central and South America
Mazda has concluded a basic agreement with our important
business partner Sumitomo Corporation to establish a
manufacturing business in Mexico and a sales business in Brazil,
and preparations for the establishment of these businesses
have already begun.
We have been considering entering new markets where
Mazda has not previously had operations, following China and
the ASEAN market, for some time. The decisions to establish a
vehicle production facility in Mexico and to enter the Brazilian
market were made with the aim of strengthening our business
in Central and South America, as a third pillar in our business
strategy for emerging markets, to enter and strengthen our
business in growth markets, and maintain cost competitiveness.
These activities have three aims.
First, by building a vehicle assembly plant and engine assembly
plant in Mexico, we will establish a production structure for
compact vehicles, primarily for Central and South America.
Next, after Mexico, where sales remain strong, we plan to enter
the rapidly growing Brazilian market, and expand sales in
Central and South America. Then, we will maximize synergies
with Sumitomo Corporation, as a business partner with a wealth
of experience and expertise in emerging market businesses.
Manufacturing in Mexico will be carried out as a joint-venture
business with Sumitomo Corporation. The commencement of
operations is scheduled for the March 2014 fiscal year, with
annual production capacity of 140,000 units. We plan to
produce the Mazda2 and Mazda3, primarily for the Central and
South American region. The investment amount will be US$500
million, with the head office to be located in Salamanca city,
Guanajuato State.
In regard to our sales business in Brazil, we will set up a
distributor joint venture with Sumitomo Corporation. Sales are
scheduled to commence in the March 2013 fiscal year, initially
of vehicles imported from Japan, and then of vehicles imported
1 Overview of Mexican
manufacturing business
Commencement of operations:
March 2014 fiscal year
Production capacity: 140,000 units / year
Models to be produced: Mazda2, Mazda3
Region to be supplied: Primarily Central and
South America
Investment amount: US$500 million
Head office: Salamanca City, Guanajuato State
2 Overview of Brazilian
sales business
Commencement of operations:
March 2013 fiscal year
Vehicles to be supplied:
Vehicles manufactured in and imported from
Japan in the March 2013 fiscal year; imports
from Mexico plant planned when it is
completed
Head office: Sao Paulo State
1Guanajuato State
Sao Paulo State
Demand in Brazil (actual, outlook)
Thousands of units
2009
Actual
2010 2011 2012 2013
Outlook
(Calendar year)
0
1,000
2,000
3,000
4,000
2009
(Calendar year)
Actual
Demand in Mexico (actual, outlook)
Thousands of units
2010 2011 2012 2013
Outlook
0
200
400
600
800
1,000
2009 2010 2011
22.3
18.9
26.5
(Years ended March 31)
2.3
2.5
3.2
Sales volume in Mexico
Thousands of units / %
Source: IHS Automotive 201 1 2Q ForecastSource: IHS Automotive 201 1 2Q Forecast
2
from the Mexican plant when it is completed, with the aim
of increasing sales in Brazil. The head office is located in
Sao Paulo State.
The main benefit of production in Mexico for sales in Brazil is
the utilization of the Agreement of Economic Complementation.
Beyond Brazil, we intend to increase sales by making maximum
use of free trade agreements with other Central and South
American countries. In addition, the commencement of
production at the Mexican plant can be expected to contribute
to even further growth in the Mexican market, where we achieved
record sales volume in the March 201 1 fiscal year. We will work to
improve costs by completely transferring Mazda production
methods developed in Japan, and promoting extensive local
procurement of parts. In addition to securing cost competitiveness,
production at the plant in Mexico will also help to reduce foreign
exchange rate risk.
Sales volume
Market share
Mazda Annual Report 201 1 21