Mazda plans $500 million auto complex in Mexico

Mazda Motor Corp. plans to build a $500 million manufacturing complex in Mexico with capacity to build 140,000 vehicles a year as the Japanese automaker expands in Latin America.

The Salamanca facility will be a joint venture with Sumitomo Corp., which will provide 30 percent of the investment, the Hiroshima, Japan-based automaker said in a statement today. Operations will begin in the fiscal year starting in April 2013, with a workforce of about 3,000 employees, Mazda said.

The complex, including auto-assembly and engine plants, will become a “compact vehicle manufacturing hub” for South America and Central America, building the Mazda2 and Mazda3 cars, Mazda said. The automaker and Sumitomo also are creating a joint sales company in Brazil as part of the regional expansion.

“Since Mazda entered the Mexican market in 2005, our sales results have steadily improved, and in 2010 we set a new record for both sales volume and market share,” Chief Executive Officer Takashi Yamanouchi said in the statement.

Mazda sold 25,116 vehicles in Mexico last year, according to the Mexican Automobile Industry Association. In the first five months of this year, its sales rose 19 percent to 10,902, according to the association.

Brazil's auto sales doubled from 2005 through last year, to about 3.5 million vehicles, and is now the world's fourth- largest market, behind China, the U.S. and Japan, Mazda said.

Mazda now produces vehicles outside of Japan in the U.S., China, Taiwan, Thailand, Philippines, Colombia, Ecuador, Zimbabwe and South Africa, according to its website. The new Mexican facility will be in Guanajuato state, about 250 kilometers (155 miles) northwest of Mexico City.

Sumitomo, based in Tokyo, is Japan's third-largest trading company.