TOKYO (AP) -- Mazda Motor Corp. on Wednesday denied a newspaper report that it has scrapped plans to build a second auto factory in North America due to sluggish demand there.
The Japanese automaker, which already has a factory in Michigan, said it has no plans for a second plant in the region.
The Nikkei newspaper said Mazda, an affiliate of Ford Motor Co., had planned to begin operating a second North American plant in the early 2010s, but that it ditched the plan due to a prolonged slump in the U.S. auto market. It did not identify its sources or say where Mazda had planned to build the new facility.
Mazda said the report "was not based on fact."
"As outlined in our midterm Mazda Advancement Plan, announced in March 2007, Mazda has no plans to establish a new vehicle production facility in North America," the Hiroshima-based automaker said in a statement.
Mazda, Japan's fourth-biggest automaker, has been a bright spot for money-losing Ford as it posted a six-fold surge in profit in the April-June quarter.
Ford has struggled amid a drastic downturn in U.S. auto sales, burning through nearly $11 billion of its cash stockpile in the past year. It reported its worst-ever quarterly loss of $8.7 billion in the second quarter.
Speculation has risen that the U.S. auto giant may file for bankruptcy, although it has denied that. Ford's stock price has also suffered, plunging to its lowest level in 25 years.
Ford formed a capital alliance with Mazda in 1979, taking a 25 percent stake. That was raised to 33.4 percent in 1996 -- a controlling share in Japan.
Apart from the Michigan plant, Mazda runs two auto factories in China and another one in Thailand. Mazda said all its overseas production plants are jointly operated with Ford.
Shares in Mazda dropped 9.6 percent to close at 284 yen in early trade following the Nikkei report.