It's not just the chip shortage causing problems.
The Mazda CX-50 might be new to the American lineup, but Mazda is already unable to keep up with demand for the rugged compact crossover. It's not just because the CX-50 has been a massive hit with buyers, however. Company sources told Automotive News there's currently a labor shortage at its Huntsville, Alabama factory where the CX-50 is built. Like all automakers, Mazda has struggled with supply issues, such as semiconductor chips, but the lack of factory workers is now causing additional headaches.
"The employment rate stands around the 2% level in Alabama," said senior managing executive officer Masahiro Moro. "Retention is not so easy, so the local staff has been working hard to provide training and ensure employee retention. We work to ensure stable operations on one shift there, and then look to move to two-shift operations. So, we are pushing back the two-shift timeline a little."
Currently, the factory has a single shift going, and it continues to have trouble not only recruiting new employees but also retaining existing ones. The factory, which is jointly operated with Toyota, has a full-production capacity of 150,000 vehicles annually, but the CX-50 is currently the only Mazda model produced at the facility.
As of the end of last month, a total of 16,006 CX-50s have been sold. The carmaker, understandably, wants to increase that figure as demand remains high despite recession concerns. And that could be a serious problem as Mazda continues to push itself upmarket; an even pricier CX-90 will arrive next year, as will a smaller CX-70, both of which are targeted squarely at American buyers.
As consumers face higher interest rates and economic difficulties in general, Mazda is justifiably worried this strategy could backfire, at least for a while. "We think the U.S. economy will likely slow down, damping consumer sentiment," said global sales chief Yasuhiro Aoyama. "High inflation and interest rates could force customers to downgrade the models they purchase. We will carefully monitor such a change in demand and find ways to produce and supply popular models. This will be a big pillar of our efforts."
For now, Mazda's upmarket push has brought increased profits, but the Alabama labor shortage, combined with other economic factors beyond its control, could spell tough times ahead.