TOKYO -- Mazda Motor plans to start producing the CX-3 sport utility vehicle in Thailand as its Japanese manufacturing sites are slated to reach near capacity.
Mazda will manufacture the compact SUV at AutoAlliance (Thailand) in Rayong Province, a major production base with an annual capacity of over 100,000 passenger vehicles. The change could take place as early as this year. The site currently makes Mazda2 compacts and other models for export.
Knock-down kits will be imported from Japan for assembly, with output reaching as much as several thousand per month. Using existing production facilities will limit investment costs.
The automobile will be launched in the Thai market in early 2016 while exports to neighboring countries also will be considered. Mazda plans to sell 150,000 CX-3 vehicles a year worldwide. All production currently is handled at the automaker's Hiroshima factory and is exported to Australia and elsewhere.
When Mazda launched the CX-3 at the end of February, President Masamichi Kogai said the company was not considering producing the model overseas. But with strong domestic demand for the mainstay CX-5 SUV and other vehicles, Japanese factories are expected to operate at nearly 95% of capacity this fiscal year. The Thai facilities have extra room, having inherited production equipment from Ford Motor.
By shifting some manufacturing to Thailand, Mazda will cut the burden on the Japanese sites and also help reduce the currency-exchange risks associated with exports. And local production will also help Mazda avoid the heavy tariffs Thailand imposes on imported vehicles.
In a similar move, Fuji Heavy Industries will nearly double annual capacity at its U.S. plants to 394,000 units at the end of 2016, moving up a planned production increase by four years. The maker of Subaru vehicles also has expanded its Japanese factories but they continue to operate at full capacity.
Japanese automakers have sought to optimize production, choosing sites that are close to markets and avoiding export tariffs. In fiscal 2014, overseas production reached records at seven out of Japan's eight makers of passenger vehicles.