Mazda Loses $327m In Q2, Vows To Fight On

Edward Niedermeyer
by Edward Niedermeyer

Mazda lost $327m in the second quarter, falling below analyst expectations as tsunami-related supply interruptions and currency woes battered the company’s bottom line. According to the Detroit News, this was Mazda’s third straight quarter of losses and the firm has lost money during its last three fiscal years. But, as this video (which, as far as I know has not yet been shown in the US) argues, the “Hiroshima spirit” which allowed locals to rebuild after the devastation of the nuclear attack in 1945, flows through Mazda. The company has a bold new design direction, an “enthusiast howl” of an ad campaign, and it says it will return to profitability when its fiscal year ends in March. But its projected profit for the full year is only $12.8m, which means Mazda is cutting it real close… and as the last quarter proved, projections can always be missed. Here’s hoping the last independent, mass-market, enthusiast-oriented automaker is able to turn things around this year and keep fighting the good fight.

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  • L'avventura L'avventura on Jul 30, 2011

    Mazda is oddly enough in a fairly good position in the medium-long term. They've already completed development in their next-generation Skyactiv platforms and engines. Essentially creating a completely new set of gasoline, diesel engines, chassis, chassis body, manual, and CVT transmissions. Which seem to be exceedingly competitive set of technologies that are separate from Ford. They are largely freed from that stage of the investment cycle. Just as importantly, they are now freed from Ford. The problem with Mazda has been that they have been overly reliant on Japanese production (tragic now considering the strong yen). As part of Ford all overseas production has been tied to Ford as part of the "AutoAlliance". Which has meant they had some perplexing production decisions like making the Mazda 6 in Flat Rock MI while the sister car was built more cost-efficiently in Sonora, Mexico. Now Mazda is building a factory in Mexico as well, and is also considering another one in Russia. Its still a question how the dynamics of the AutoAlliance Thailand factory will transpire with increasingly diverging products between Mazda/Ford over the long-term, which has planned since 2007 before the Ford Mazda divorce, and will come online fairly soon (Brose Thailand has come online recently). Mazda has also been able to dissolve their JV with Ford in China. Mazda getting the Nanjing factory with Changan, and Ford getting the Chongqing factory. This allows Mazda to control their Chinese operations in their own best interests rather then Ford's in a very crucial market. Either way, in the next few years Mazda will have production capacity in key areas (Thailand/Mexico) that have tariff-free access to most major markets; North America, Europe, Japan, and Latin America. They have clear Chinese strategy that isn't tied to Ford. And most importantly they have competitive and unique products coming on the horizon.

    • See 3 previous
    • Robert.Walter Robert.Walter on Jul 31, 2011

      Good reason for the production separation in China was the terrific growth there makes it possible to float two separate boats (as opposed to the conditions which make the AAT arrangement still workable.) Good reason that M6 didn't get produced on the same line as the NACD cars was because of a lack of capacity in Mexico, and AAI was originally a Mazda plant that Ford had to retake equity in after Mazda was unable to keep up with purchase payments. Once S197 went in, there was not enough capacity to produce NACD as well. As pointed-out, Mazda biggest threat is strong yen and market-share pressure.

  • Geo Geo on Jul 30, 2011

    The music in the ad was fantastic.

  • Geozinger Geozinger on Jul 30, 2011

    I've long thought of Mazda (and to some extent Nissan) as the Japanese Pontiac. Pretty decent cars, decent image, so-so marketing and spotty reliability. Between postings here and anecdotal references from friends and relatives, I see little has changed in that regard. I think I'll take my chances with a Chevy again. "The last independent, mass-market, enthusiast-oriented automaker" label really belongs to Honda IMO, but maybe not so much in the US. Mazda, Nissan, and to a larger extent Mitsu, Suzuki are losing traction, slowly being crushed by the Toyota, Honda, VW, GM, Ford and Hyundai sales and marketing machines. I guess we'll see what happens when they launch their new product here.

  • Syke Syke on Jul 30, 2011

    Had a Mazda3 and absolutely loved it - unfortunately the wife (it was her car, her choice) put the engine block into the instrument panel on I-295. Which is the last time she's ever driven/will drive a car. Always was disappointed with the gas mileage, but given that the handling was about as close to my previous E36 M3 as a front driver will ever get, I loved the car. Even with an automatic. Due to both our experience with that car, and the dealer (still in business and still close to my place of work), a Mazda2 is one of my two main considerations when I shop for a new car this coming winter. As to their ads? I love the one that states "more Mazda's race than any other brand" (yes, I'm paraphrasing) that I catch on Speed during the F1 races. Up yours, Porsche!