July 30, 2012 / 6:10 PM / 5 years ago

Mazda drops plan to export cars from Mexico to Brazil-Nikkei

July 31 (Reuters) - Mazda Motor Corp has abandoned its plan to ship automobiles to Brazil from a plant it is constructing in Mexico due to the South American nation’s new import restrictions, the Nikkei reported.

Instead, the automaker plans to begin local production in Brazil by 2014, the business daily said.

To protect the local industry, Brazil began restricting the value and volume of passenger cars that can be imported tariff-free from Mexico in March, the Japanese business daily said.

Mazda is in talks with a Brazilian firm to outsource the production of over 70,000 subcompacts and other models at the outskirts of Sao Paulo using the Japanese’s company’s cost-saving methods, the Nikkei reported.

The Mexican plant is expected to start with a production of 140,000 units a year and more than double the output to 300,000 units or more in a few years, the paper said.

Mazda will also target the European market with its Mexican plant to make up for the loss of exports to Brazil, Nikkei said. ((aditi.shrivastava@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 4135 5217; Reuters messaging: aditi.shrivastava.reuters.com@reuters.net

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