Mazda reports quarterly loss of $327 million after production hit by March earthquake, tsunami

TOKYO – Mazda reported its third straight quarter of red ink Friday after vehicle production was hurt by the earthquake and tsunami in Japan.

Automakers from Japan to the U.S. suffered disruption to production when key parts failed to arrive from suppliers damaged by the March 11 disaster in northeastern Japan.

Mazda said its loss for the April-June quarter totalled 25.5 billion yen ($327 million). It had a loss of 2.1 billion yen a year earlier. The latest result was worse than the 22 billion yen loss forecast by a FactSet survey of analysts.

But the Hiroshima-based manufacturer stuck to its forecast for a return to the black in the fiscal year ending March 2012. It expects an annual net profit of 1 billion yen ($12.8 million) and sales to fall 6 per cent to 2.19 trillion yen ($28 billion).

Mazda, which makes the Miata and RX-8 sportscars, said in a release it sold 281,000 vehicles worldwide for the April-June quarter, down 11 per cent. Sales declined in Japan, North America and Europe, according to Mazda.

For the full fiscal year, Mazda expects to sell more vehicles than the previous year at 1.3 million vehicles, up 2.6 per cent on year, with much of the momentum coming from an expected 14.5 per cent sales surge in China.

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Quarterly sales revenue of 408 billion yen ($5.2 billion) was down 29 per cent from a year earlier.

Mazda achieved record sales or market share in Australia, China, Thailand, Mexico, Indonesia and Malaysia, it said.

Mazda acknowledged that concerns remained about a strong yen, which erodes the value of overseas earnings of Japanese exporters, as well as the rising price of raw materials and oil.

Mazda said that an unfavourable exchange rate erased 3.1 billion yen ($40 million) from its bottomline.

Another fear is an electricity shortage in Japan after reactors at a nuclear power plant in northeastern Japan were sent into meltdown by the March 11 tsunami. Another plant is being shut down in central Japan because of quake fears.

Mazda said production has returned to normal at its Japan plants recently.

It said it is banking on growth from the improved fuel efficiency of its gasoline engine Skyactiv car, that it’s planning to roll out in various models, starting with the remodeled Demio. The automaker said the Demio was selling well in Japan.

Mazda, which has lost money for the last three fiscal years, is struggling to assert its brand without counting on its longtime partnership with Ford.

Mazda does not have flashy green technologies in its lineup that its bigger Japanese rivals do – such as the hybrids at Toyota Motor Corp. or electric vehicles at Nissan Motor Co.

Dearborn-based Ford bought 25 per cent of Mazda in 1979, raising it to 33.4 per cent in 1996. But Ford began cutting ties in 2008, and last year lowered its ownership to 3.5 per cent.

Earlier this week, Nissan reported a smaller-than-expected 20 per cent drop in April-June profit to 85 billion yen ($1 billion). Chief Executive Carlos Ghosn said the numbers show Nissan is holding up despite huge odds.

Honda Motor Co. reports earnings Aug. 1, and Toyota on Aug. 2.

Mazda stock inched up 1 per cent to 213 yen. Earnings were announced shortly after trading ended in Tokyo.