Mazda Motor Corporation will close a passenger car factory in Hiroshima on Sept 14 as part of efforts to shift production abroad, Kyodo News said.

According to the report, Mazda president Mark Fields told reporters that the company plans to start producing cars in Europe in 2003 and the closure of the factory will reduce Japanese production capacity by some 25%.

A replacement for the current Demio will be built in a Ford plant in Valencia, Spain, from 2003 using petrol and diesel engines supplied by Ford. The new model will also share its platform with Ford-badged cars.

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