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Mazda plans plants in Thailand, N. America -paper

Written by: Staff

TOKYO, Nov 24 (Reuters) Mazda Motor Corp. plans to invest more than 50 billion yen (0 million) to build a small-car plant in Thailand together with top shareholder Ford Motor, and later may bring a plant of its own onstream in North America, the Nihon Keizai business daily reported on Friday.

By boosting output capacity, Mazda, held one-third by Ford, is set to play a key role in the Ford group's small-car operations amid growing demand for fuel-efficient Mazdas in the United States and Europe, the paper said.

Mazda and Ford want to begin operations in 2009 at the Thai plant, which is to roll out some 200,000 vehicles per year including the 1.3-litre Demio, it said.

Mazda is also considering building a new plant on its own in North America, possibly in Mexico, aiming to bring it onstream in the first half of the 2010s, it said.

The paper said Mazda positions the Demio as its global strategic vehicle and will export it from Thailand largely to the North American market.

Mazda spokeswoman Aya Takahashi said nothing concrete had been decided but the company has been considering various possibilities to boost capacity, both in Japan and abroad, to meet growing demand for its cars in response to higher gas prices and an expected tightening of emission regulations.

Mazda might outline ways to add capacity when it announces its next mid-term business plan in the spring, Takahashi said, without giving details.

Earlier this month, Mazda posted a 55 percent surge in quarterly operating profit as a weak yen and sales expansion in the West offset slumping domestic demand, and it bumped up its annual forecasts beyond market projections.

With volumes steadily growing, analysts say Mazda's most pressing task now is to expand its output capacity -- now at around 1.45 million units globally -- while reducing its high sensitivity to exchange rate swings through local production.

Shares in Mazda fell 1.9 percent to 781 yen in morning trade.

The benchmark Nikkei average was down 1.3 percent.

Reuters SBA VP0735

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