Mazda Motor tumbles to quarterly loss

[February 03, 2011]  TOKYO (AP) -- Mazda Motor Corp. sank into the red in the October-December quarter, unable to overcome a stronger yen and lackluster sales in Japan.

The Japanese automaker said Thursday it booked a quarterly net loss of 2.67 billion yen ($32.7 million). It had net profit of 4.42 billion yen a year earlier.

Revenue inched up 0.5 percent to 560.24 billion yen ($6.9 billion) while operating profit slid 90 percent to 1.05 billion yen ($12.9 million).

Demand for cars in Japan fell sharply in the quarter after government subsidies for green car purchases expired, Mazda said. It also cited foreign exchange losses and higher sales costs.

The Hiroshima-based car maker said it is implementing steps to boost profitability across the company, including expanding sales in China, Thailand and other emerging markets.

Mazda, whose models include the Miata roadster and RX-8 sportscar, is a relatively small player in the auto industry, with a 5 percent market share in Japan and a 2 percent share in the U.S.

In December, Ford cut its stake in Mazda from 11 percent to 3.5 percent, marking a symbolic shift in a longtime U.S.-Japan auto alliance.

In contrast to bigger rivals such as Toyota Motor Corp. and Nissan Motor Co., Mazda is taking a slower path when it comes to hybrid and electric cars. It has high hopes for its next-generation gasoline and diesel engines that feature significantly improved fuel efficiency. The technology will make its debut this year in the Demio, which can reach 30 kilometers per liter (75 miles per gallon).

Mazda left its outlook for the year ending March 2011 unchanged. It continues to forecast net profit of 6 billion yen on revenue of 2.3 trillion yen.

The company reported earnings after financial markets closed. In trading Thursday, Mazda's shares fell 2.5 percent on the Tokyo Stock Exchange, worse than the Nikkei 225 stock average's 0.3 percent decline.

Mazda bases its earnings on Japanese accounting standards.

[Associated Press; By TOMOKO A. HOSAKA]

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