By on April 5, 2013

A weak yen and a slew of new models has Mazda within sight of profitability. With Mazda heavily dependent on exports, the yen’s 16 percent decrease in value relative to the U.S. dollar could not have come at a better time for Mazda, as it readies a whole slate of new products for sale.

According to Bloomberg, Mazda is on track to turn a profit for the first time in nearly 5 years. Aside from the yen, an onslaught of new product and increased demand has helped Mazda revive its fortunes. The new Mazda6 will be followed by the Mazda3, a critical car for the Japanese auto maker. The two models account for half of all Mazda’s sales. Following these two will be the next generation Mazda5, which will incorporate SkyActiv technology and be produced for Nissan as the Lafeasta minivan for the Japanese market. A new MX-5 jointly developed with Alfa Romeo may be derailed by a possible sale of Alfa Romeo, but a plan to build a new subcompact for Toyota is still underway. Mazda plans to introduce a total of 8 new models incorporating SkyActiv technology by 2016.

The Toyota deal resulted in Mazda expanding capacity at its new Mexican plant from 140,000 annual units to 230,000. Despite the favorable exchange rate, Mazda will remain greatly exposed to the yen’s fluctuations as long as the majority of its cars are built in Japan and subsequently exported. The Mexican plant is a positive step towards localizing production, and should insulate Mazda from currency shocks in the crucial North American market.

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27 Comments on “Weak Yen, New Models, Has Mazda In Reach Of Profitability...”


  • avatar
    Jeff S

    Nice looking car, reminds me of the new Fusion. Derek does this 6 share the same platform as the 2013 Fusion? This is a much nicer looking car than Camry, Accord, Malibu, and 200.

    • 0 avatar
      mike978

      It is a 100% Mazda platform. No formal engineering links between Ford and Mazda now for new products.

    • 0 avatar
      brettc

      Saw a new Mazda 6 on the road the other day in silver. It was a nice looking car. Can’t wait to test drive the Sky-D version.

      • 0 avatar
        jaje

        Sky-D is the first production all aluminum block diesel engine. It also has the lowest production compression ratio as well. EPA has its mileage is only 42mpg but it’s not the reality you’ll get once the engine is broken in with 50k miles – likely you’ll see high 50′s on average (TDIs are regularly getting mid 50′s mpg on the highway whereas their gas counterparts get low 30′s to even high 29′s) if you are not a lead foot.

  • avatar
    Sammy B

    Nice to hear they’re planning on a next-gen Mazda5. The Nissan deal on that is news to me, but definitely good. Being able to get more production helps for sure.

    As they return to profitability, let’s hope a Mazda6 Wagon is once more in the cards :)

    Make it a special order and charge a premium for it. Don’t horse around with trying to keep it in stock or anything.

  • avatar
    NotFast

    At least one manufacturer realizes that it’s all about the product. I think that Marketing and similar BS can sell a few more cars, but GOOD CARS help sell cars more.

  • avatar
    Dubbed

    So a Japanese company, Mazda, is making profits from monetary policy created by the japanese government to intervene so to weaken the yen.

    OK

    • 0 avatar
      TonyJZX

      isnt that the story of hyundai kia and what china hopes to emulate?

      make cars so good that you buy one inspite of being korean?

    • 0 avatar
      imag

      Give me an absolute m-f-ing break. The Yen has been strong because the Japanese have been a nation of savers. While we and the Europeans have trashed our own currencies with overborrowing and then printing money to hand to bankers to drag our economies out of the mud, the Yen has been a safe currency with a resulting high price.

      Of course the high price of the Yen has had the effect of crushing the profits for companies building in Japan. The Japanese government has kept it high to the detriment of their own industries for years in order to protect the value of their savers’ money. Now, when they finally give their own industry a tiny bit of relief, folks like you are already crying out about currency manipulation. It’s unreal. Have you totally missed the last ten years?

      Where are your complaints at the currency manipulation of the Fed, which has been fabricating dollars by the billions, essentially stealing money out of every American’s pockets as they devalue our currency? Have you been complaining about the currency manipulation of the European Union? From that perspective, the record profits by VW are a direct result of the European debt crisis. I missed you crying out about that.

      I swear, people just have it in for the Japanese.

      • 0 avatar
        ect

        Interest rates in Japan have hovered around zero since the early 90s. In 1999, in fact, the Japanes government issued bonds with a net rate of -0.5% – i.e., we’ll charge you money just to keep your principal safe.

        The Japanese are a nation of savers, but the profound depression they’ve been in since the late 80′s (when the government decided to protect banks, and banks focused on propping up bad loans instead of seeking worthwhile new borrowers) has not been kind to savers at all.

  • avatar
    carrya1911

    The new Mazda 6 is tempting…but in terms of long term reliability I stuck with Honda.

    • 0 avatar
      DeadWeight

      Really?

      Mazda was the 2nd best make in terms of long term reliability, bested only by TOYOTA’S SCION DIVISION, and essentially on par with Toyota and Honda.

      Yep. I’m a fanboy.

      Any small car company like Mazda that puts out genuinely distinct designs, successfully capturing the true sporting aspects of driving (on a relative basis, whether in rear wheel or “fail” wheel drive vehicles, in a sea full of Camtoasters), and is able to design & fabricate interiors that look like they belong in vehicles at twice the price (as just one example, I’ve maintained the MX-5 interior, especially when trimmed in that baseball glove color leather, is worthy of ANY Porsche — the gauges and instrument cluster alone are worth the price of admission; Mazda is the new VW of interiors), and genuinely tunes their suspensions and their steering systems to communicate true input to the driver, wins my heart.

      Mazda’s management and engineers actually have the balls to do something that resembles focusing on product first and foremost, which isn’t anything that I can say about any other high volume manufacturer’s non-halo products.

      Mazda is a stubborn, headstrong & resilient little (relatively speaking) manufacturer of some excellent vehicles that, in some cases, have arguably otherwise saved drivers of entire categories of affordably priced offerings from death from boredom.

      • 0 avatar
        juicy sushi

        I just have to add one caveat. I live in Ottawa, and see Mazda3′s of a certain vintage being eaten from the rear by rust. I don’t see that on the newer ones (obviously), and really, really like the current 3. I would switch from my current ride in a heartbeat if it was clear that the rust factor was now competitive with the competition. If they didn’t rust the like the Alfa Romeos they emulate in soul and looks, then there would be pretty much no argument I could think of against buying one.

        • 0 avatar
          vertigo

          I’m in Southern Ontario myself, and own an ’05 Mazda3 with 149k on it, and the rear fenders are rusting right out of the car.

          There are small spots starting around the right back up light assembly and the bottom of the hatch too.

          The rust is the only thing I don’t like about this car. Otherwise it’s been perfectly reliable and lots of fun to drive.

          • 0 avatar
            juicy sushi

            Yeah, I don’t see it on tge other Mazdas nearly as much either. Just the 3. Which bugs me so much as 3 is the one I really want.

    • 0 avatar
      ccd1

      Have to agreed with DeadWeight. Bought a Mazda6 Grand Touring (6 cylinder) and there was only one unscheduled repair in 5 years and counting. That repair was a battery that failed a charge test during routine maintenance and was replaced partially under warranty. That’s it.

  • avatar
    Orangutan

    Well, no doubt a new Mazda5 will be on the way, but not until at least 2016 model year. The Mazda5 was just redesigned for North America for the 2012 model year, and the previous generation lasted from 2006 – 2010 (2011 was bypassed here). That said, for the 2014 model year the Mazda5 will get the 2.0 Sky-G and both manual and automatic transmissions. The Japanese market 5 (Premacy) just received Skyactiv technology for this year, so it’ll be rolled out to us next year. Whether it gets the larger 2.5 Sky-G is another question, but given the fact that the 2.0 is the only Sky in the current Mazda3, I’d say it’s a good bet that’ll be the engine that finds its way into our 5.

  • avatar
    L'avventura

    I wouldn’t go as far as calling the yen “weak” just yet. Its still hovering near the low-mid 90s.

    Its ‘weaker’ than was from its insane highs of the mid-70 yen/$ exchange from last year, but historically its still comparatively strong. Both Carlos Ghosen & Akio Toyoda see 100 yen/$ as ‘neutral’. Morgan Stanley sees the yen at 105 yen/dollar by next year.

    The real reason for the yen’s ‘strength’ is really because the dollar has weakened after 3 consecutive rounds of US QE (printing money) since the housing market crash, and every other major economy including China, EU, S. Korea, etc have also basically printed money to keep up with the US’ weakened dollar. Japan, who has a horridly high public debt, have avoided QE due to political unwillingness and economic fear of their weak debt situation.

    • 0 avatar
      Dubbed

      Yesterday the Bank of Japan announced it would be injecting $1.4 trillion dollars over two years. They plan to pump $73 billion each month. And to put that into some context the Fed has been pumping $85 billion with QE in each month.. In October of 2011 the BOJ began its “asset purchase plan”.

    • 0 avatar
      ect

      Japan also benefits from the fact that its public debt is almost entirely held internally – i.e., by Japanese creditors. Just like US debt after WWII.

  • avatar
    SaulTigh

    New 6 is beautiful in person, better looking IMHO than anything else in it’s class at the moment. Also really liked the interior, which is was much classier than anything I’ve seen from Ford and Honda lately. I’m going to test drive one of the new diesels when they come out.

  • avatar
    thornmark

    AutomobileMag just tested the midsizers and the Mazda6 came in a close second to the Accord Sport so it must be good.
    http://www.automobilemag.com/reviews/driven/1303_midsize_madness_day_five/

  • avatar
    ptr2void

    I just got my new 3 (iGT MT) and am really enjoying it, but I’ve got to say that the new 6 is sexy. Were it available currently with the MT and heated seats I probably would have went that route.


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