Mazda may assemble cars in Brazil after abandoning a plan to ship vehicles from a Mexican plant under construction due to the South American nation’s import restrictions, the Nikkei newspaper reported.
The company has decided that Mexican-built vehicles would not be cost competitive in Brazil and intends to begin local production in Brazil as early as 2014 instead.
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Mazda is currently in talks with a Brazilian firm over outsourcing more than 70,000 units of production to the outskirts of Sao Paulo. The Japanese automaker’s low-cost production methods are to be introduced at the partner which is to build and sell subcompacts and other models.
To protect its domestic industry, Brazil began restricting the value and volume of passenger cars that can be imported tariff-free from Mexico in March.
Mazda currently assembles some passenger cars for North and Central American markets at its US joint venture plant with Ford. This factory is due to stop production of the Mazda6 before the end of the year.
The Mexican plant, Mazda’s first wholly-owned overseas factory, is expected to initially produce 140,000 units a year with plans to more than double output to 300,000 units or more within a few years.
