Mazda raising production at Thai plants

Thailand’s manufacturing sector received some much needed fuel injection last week when Japanese automaker Mazda Motor Corporation announced it is raising its production targets at its Thai factories this year and next to meet rising demand for its vehicles in Asia and beyond.

The announcement was made as Princess Sirindhorn officially opened a new Mazda production plant for transmissions, deepening the automotive sector’s supply base in Thailand. With virtually every major international automaker already manufacturing their vehicles in the Kingdom, expansion in manufacturing capability is often in the parts and supplies subsector, reflecting the maturity of the market and the vertical integration of production.

The new plant means that Thailand is the only country outside of Japan where Mazda is fully integrated and can produce cars without requiring imports of parts and components from other Mazda facilities overseas.

Although the plant’s official opening was last week, it has been turning out SkyActiv-Drive transmissions since January and will have the annual capacity to produce 400,000 such drives. The new facility required a $206 million investment by Mazda in its subsidiary Mazda Powertrain Manufacturing Thailand (MPMT).

“With the purpose of strengthening our business foundation in such an important market, Mazda incorporated MPMT as a wholly owned affiliate in February 2013, and its role is to make the most important core parts of our vehicles, including engines and transmissions,” said Masamichi Kogai, president and chief executive officer of Mazda Motor Corporation.

The new facility will also produce transmissions for export to Mazda assembly operations in other countries. Later this year, it will begin manufacturing SkyActiv engines, with an annual capacity of 30,000 units. Mazda is investing an additional $84 million to expand the facility in order to produce engines.

“The engines and transmissions produced by MPMT will supply our production facilities around the world including Malaysia, Vietnam, Mexico, China and Thailand,” Kogai said.

To meet global demand for its vehicles, Mazda is increasing its manufacturing targets in Thailand and China. Because of more competitive labor costs, tax regimes and strong infrastructure, Mazda executives said it makes more sense to produce more vehicles in its Thai and Chinese facilities rather than at home in Japan.

Mazda’s new targets are to produce 1.49 million vehicles this fiscal year and 1.65 million by the end of the 2016-17 fiscal year, compared with 1.399 million units in fiscal year 2014-15. The fiscal year runs from October through September.

“Now it is no exaggeration to say that, as a production base for Mazda, Thailand is as important as Japan itself. Full-scale operation at MPMT has made Thailand the first country outside of Japan where Mazda can carry out comprehensive vehicle production, from engine to transmission through to final vehicle assembly,” Kogai said.

 

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Thailand Focus August 17, 2015

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