Mazda Motor Corp. will cease production of its Mazda2 subcompact car at Ford Motor Co.’s Valencia, Spain, plant when it launches a new B-segment car next year.
The auto maker says it will consolidate production of the new B-car at its Ujina plant in Hiroshima, Japan, where the yen’s current weakness against the euro will help boost profits.
Relocating production to Japan also allows Mazda to maximize efficiencies through economies of scale by lumping together production of its B-segment subcompact cars.
The Ujina plant currently is at 87% of its 500,000-unit annual capacity, leaving room for roughly 65,000 more vehicles, Reuters reports.
A Ford of Europe spokesman tells Reuters it will ramp up production of existing models to make up for output lost from Mazda’s withdrawal.
Ford, which owns a 33% stake in Mazda, says the Japanese auto maker’s output this year has fallen to about 7% of the Valencia plant’s total annual 400,000-unit capacity.