Mazda Profits Down 44.6 Percent From Previous Year

The losses were anticipated, but ended up being slightly worse than predicted.

byGabriel Loewenberg|
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Mazda's latest fiscal year report is out and the numbers don't look good. Operating profit was down 44.6 percent compared to the previous fiscal year, which ended up being 4.3 percent lower than the company had forecast in February. Though Mazda was anticipating a poor year, its fourth quarter performance was much worse than expected, with profits down 56 percent from the same quarter last year. 

Mazda's losses came from a variety of sources. Declining sales in the Japanese and North American markets and increased manufacturing costs to improve product quality were two driving factors. The more surprising and uncontrollable contributor was the strength of the Yen. Exchange rates from weaker currencies to the stronger than anticipated Yen hurt Mazda profit from overseas sales.

It wasn't all bad news, though. Sales in Europe were up slightly, while sales in China were 24 percent higher than the previous year. Mazda had strong sales of its line of crossovers, the CX-3, CX-4, CX-5, and CX-9. The latest MX-5 did well, too. 

Going forward, Mazda plans to expand the SKYACTIV lineup by offering its 2.5-liter direct-injection turbo engine on a wider range of vehicles. North America will get a diesel CX-5 later this year. In Japan, Mazda will launch the CX-8, a three-row crossover. The driver assist safety system i-ACTIVSENSE will become standard equipment on all its vehicles sold in Japan.

Mazda forecasts that it can claw back some of these losses in the current fiscal year. The Japanese automaker predicts a slightly more favorable exchange rate to both the dollar and British pound. It is also expected that sales in Japan and North America will rebound. In anticipation of the losses of the last fiscal year, Mazda has been preparing and positioning itself to move forward. When Mazda's first quarter report is released in about three months, we'll get an inkling as to if it's all going according to plan. 

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