(Bloomberg) -- Mazda Motor Corp.’s Mexico chief said the Japanese automaker will reconsider its investment strategy in Mexico unless it receives clarity on tariff threats from Donald Trump.
Mazda will go to an undisclosed “plan B” for its Mexico production strategy should the US President-elect’s threat of putting a 25% tariff on goods from Mexico come to fruition, Mazda Mexico director Miguel Barbeyto said.
“We want to continue investing in the country,” Barbeyto said. But without government assurances, “the truth is that it would not be a good business for Mazda,” he said, adding the company is halting its investment until there’s more certainty.
Mazda joins a growing number of auto companies, including Tesla Inc., Stellantis NV and BYD Co., that have either paused or signaled they may reconsider plans in the country that could be upended by potential new tariffs that Trump has threatened to levy once he takes office. In addition to tariffs on Canada and Mexico, Trump has vowed to add an additional 10% to goods from China in a move to bring more production to the US.
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Mazda sends about 70% of the vehicles produced at its plant in Guanajuato state to the US, Barbeyto said, while about a quarter of the output is sold domestically. The remaining 5% goes to Canada, Colombia and Central America. The plant produces four car models, including the CX-30 crossover SUV and the Mazda3 sedan.
The automaker aims to produce a record 210,000 vehicles this year in the country, up from 202,506 in 2023. It expects to sell a total of 100,000 units in Mexico annually, including imports, which would make it the third largest market for the company, Barbeyto said.
Mexico’s Economy Minister Marcelo Ebrard called a meeting last week with Mexico’s auto industry chiefs to discuss the tariff threat and the potential revision of the US-Mexico-Canada trade agreement known as USMCA, which is scheduled for a joint-review by the three countries in 2026.
Ebrard asked the automakers for information to help Mexico strengthen its negotiating position and requested that companies substitute components from China for versions from North America, said Barbeyto, who attended the meeting. Mazda is working to meet the requests, he added.
Mazda’s shares dipped as much as 0.4% in early Tokyo trade on Thursday.
Trump’s threats are particularly worrisome for auto manufacturers because they rely on thousands of parts that can cross multiple borders before they’re installed in a car during final assembly.
“What happens if the US government imposes tariffs? Well, we have a plan B. But we are working to continue growing in the country, both in manufacturing and in the sale of new vehicles,” Barbeyto said. “We are confident in both governments, but above all, our government, the federal government in Mexico, that they will negotiate very well.”
Tom Donnelly, the chief of Mazda’s US operations, said in a separate interview this week that about 30% of the company’s US sales volume comes from Mexico. He added the company is considering offsetting those imports with spare capacity at a plant Mazda runs jointly with Toyota Motor Corp. in Alabama if Trump imposes new tariffs.
“We’ve been scenario-planning the possibilities of things, inclusive of this, for some time,” Donnelly said, referring to potential tariffs. “We’re looking at things we can do in and around that.”
The Alabama plant, which opened in 2021, currently makes about 80,000 CX-50 crossovers a year, but it has capacity to produce up to 150,000 vehicles annually. The CX-50 uses the same chassis and other core parts as the Mazda3 and CX-30 models imported from Mexico, but Donnelly declined to spell out how that extra production capacity could be utilized.
--With assistance from Nicholas Takahashi.
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