Mazda mulls building plant in Mexico

Mazda Motor Corp. is considering building a factory in an emerging market, possibly Mexico, to take advantage of burgeoning demand.

"It is natural that we are considering entering an emerging market to expand our business ... We are considering every possibility," Mazda said in a statement Tuesday. The company, Japan's fifth-biggest car maker by sales volume, said it may establish a base in an emerging economy together with a trading house.

A Mazda spokesman said that while Mexico is one of the markets it is looking at, nothing had been decided.

A person familiar with the matter said Mazda and trading house SumitomoCorp., which owns a 3% stake in the car maker, are looking at several sites in Mexico for a possible factory.

The two companies are considering producing small cars, such as the Mazda2 and the Mazda3, at the plant for markets in Central and South America, the person said. The plant may have a production capacity of about 100,000 vehicles a year, the person said.

On Nov. 19, Sumitomo increased its stake in Mazda to 3% from 0.42% by buying some of the shares sold by Ford Motor Co.

Ford in November scaled back its partnership with Mazda, reducing its stake to 3.5% from 11% by selling 7.5% to several Mazda business partners.

Mazda makes vehicles in three countries outside Japan—the U.S., Thailand and China—all through joint operations with Ford. The new plant could be the company's first overseas plant without Ford. Mazda said it doesn't know whether Ford would join in the project.

In Latin America, Mazda sells its vehicles in Mexico, Columbia, Ecuador and Chile. It sold about 52,000 vehicles in those markets in 2009, accounting for only 4.5% of global sales last year.

Enhancing sales in the region could help Mazda meet or even exceed its global sales target of 1.7 million vehicles in the year through March 2016. Mazda has said that goal doesn't include sales in Central and South American markets that it hasn't yet entered.

The sales target represents a 43% jump from the 1.2 million vehicles it sold in the last fiscal year ended March 2010.