Mazda Won't Build Second Plant in N. America

Will step up production in Thailand

Mazda Motor Corp. on Oct. 15 said it had no plans to build a new plant in North America, opting to step up production in Asia. With car sales in the U.S. in a slump, Japan's fifth largest automaker, which is 33.4% owned by Ford Motor Co., said it was expanding domestic production capacity and building a factory in Thailand.

"We are convinced that not attempting to expand production in North America was the right management decision," the company said.

Mazda had initially intended to roll out fuel-efficient midsize cars and other models from the first half of the 2010s at a second North American plant, Nikkei economic daily newspaper said. It had considered using an idle Ford factory or building a new plant in partnership with the U.S. firm, the report said.

Press reports said last week that Ford plans to sell most of its shares in Mazda to raise badly needed cash amid the current global financial crisis. Ford invested in Mazda for the first time in 1979 and raised its stake to 33.4% in 1996 when the Japanese carmaker's business slumped. The two companies have since profited from joint development of compact cars and Mazda has recovered its financial health.

Mazda's operating profit slipped 12% in the three months to June from a year earlier to 28.26 billion yen (US$278 million) due to a stronger yen and rising material prices. However, Ford had a record $8.7 billion loss in the second quarter.

Copyright Agence France-Presse, 2008

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