Japan and China sales prop up Mazda in first half

Strong vehicle sales in Japan and China propped up Mazda’s sales in the first six months of its fiscal year, offsetting declines in other geographies.

Overall, that boost wasn’t enough to prompt the Japanese carmaker to upgrade its earnings outlook for the fiscal year ending March 31, 2018.

Mazda, which is headquartered in the Hiroshima prefecture, is tipping an operating profit of ¥150bn for fiscal 2018, with the drag from reduced wholesale volumes and higher marketing costs in the US offset by foreign exchange effects. After tax, Mazda tips a net profit of ¥100bn on revenue of ¥3.35tn.

All those will still be higher than the previous year, while operating and net profit is still sitting below analysts’ forecasts according to a ThomsonReuters survey.

For the September quarter, Mazda’s net profit fell by a quarter from a year earlier to ¥27bn on a 11 per cent jump in sales to ¥854bn. That compared to analysts’ forecasts for bottom line income of ¥27.3bn on sales of ¥835.5bn, according to a ThomsonReuters survey.

In August, Toyota took a 5.05 per cent stake in Mazda in a partnership that would see the pair build a $1.6bn plant in the US as well as coordinate work on developing electric and self-driving vehicles. A key attraction for Mazda in doing the deal is that it does not have manufacturing facilities in the US, the second-biggest market for car sales in the world.

Mazda has been relatively slow among carmakers in jumping into the electric vehicle market, and is known to have an overall preference for internal combustion engines.

This week, Mazda reported global production of its vehicles in the six months to September 30 was up 1.3 per cent from a year ago to 767,804 units, driven by strong growth in commercial vehicles in the home market of Japan and abroad.

Image source: Bloomberg