Mazda, a Japanese automobile manufacturer, has decided to move its SUV production from Thailand to Japan. The Thailand plant produces some parts of the SUV and exports them to Australia.
The company made this move because the Thai currency baht exchange rate against the U.S. dollar rose nearly 8.6 percent in a year. And it is only worsening Mazda’s profitability.
According to the Nikkei Asia Review, Mazda has decided to turn its SUV “CX-3” model, into its plant in Hoju City, Yamaguchi Prefecture.
The annual production capacity of the Mazda Thailand plant was about 135,000 units. Within the number, the CX-3 production was around 25,000 units. Some 14,000 units, or 56 percent of the CX-3 shipments manufactured at the Thai plant, were exported to Australia.
Baht going strong, Mazda operating profit drops
Mazda cited Thailand’s sharp decline in operating profit as the reason for the relocation of production supplies to the country. As the value of the baht currency has risen sharply in the current account surplus.
The value of baht against the Australian dollar jumped 8 percent from earlier this year. Analysts say that Mazda’s operating profit from April to September decreased by 37.5 billion yen (approximately $342 million) due to the strong baht.
Mazda is not the only automaker that is pushing for Thailand as the value of the baht rises. U.S. automaker GM also announced in August that it would cut back on production at its plant in Thailand, cutting about 300 jobs.
GM’s production volume at its Thai plant fell 15 percent on-year in the January-October period, while U.S. Ford Motor Co. also cut production at a similar rate, according to market researcher Mark Rines. The number of cars produced in Thailand recorded 1,725,400 units in the January-October period, down 4 percent from last year.
Meanwhile, other Japanese automaker companies are establishing a new alliance for future development. Nissan, Renault, and Mitsubishi are looking forward to a future together.
