By on July 29, 2011

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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48 Comments on “Mazda Loses $327m In Q2, Vows To Fight On...”


  • avatar
    John Horner

    I have been saying that Mazda is way below critical mass for quite some time now. This latest news is quite consistent with my long term view that Mazda cannot continue to compete as a mid-market, stand alone player.

  • avatar
    serothis

    I really hope their sky-activ engine line and the next mx-5 are a hit because I really love what they do.

  • avatar
    SecretAznMan

    A visit to the Mazda museum will show you a rich and proud legacy without a bunch of needless glitz. They appear to be the most passionate of all the automakers both in talk and in product. I do fear the worse for them as an independent automaker though.

    Why then is there such a different sentiment about Mazda versus Saab? Both are plucky manufacturers marching to the beat of a different drum. Why the well wishes here but pessimism, claims of hubris, etc there?

    • 0 avatar
      SilverHawk

      It’s simply the fact that Saab sales have slipped below the point of no return. Most true enthusiasts wish them well, because of their “rich and proud legacy”, but salvation now can only come in the form of a Chinese buyout, which is not what Youngman has asked the Chinese NDRC to approve. Therefore, some form of insolvency is coming soon.
      Mazda sales are much higher than Saab, but they are manufacturing mainstream vehicles in competition with the worlds largest automakers, who can make more profit per vehicle than Mazda can. They appeal to those who enjoy driving (enthusiasts), but it’s very difficult to appeal to drivers and mainstream consumers at the same time. With the enthusiast market relatively flat, their business plan needs a rework, and their finances indicate that a friendly merger would be helpful as well.

    • 0 avatar
      th009

      Because Mazda is a functional company at least reasonably close to the break-even point. Saab, on the other hand, is beyond the help of life-support systems, except in the minds of its most ardent fans.

    • 0 avatar
      George B

      Because Mazda makes interesting affordable cars with some shared DNA with Ford while Saab makes outrageously overpriced cars with some shared GM DNA. A Mazda has a similar price to a Ford while a Saab has a much higher price than it’s equivalent Buick. I’m only interested in Saab in the context of the half-price going out of business sale.

    • 0 avatar
      eldard

      Because Saabs make me laugh?

    • 0 avatar
      PintoFan

      Because Mazda isn’t an ex-GM division that was condemned by Bob Lutz. You don’t think that exclusive book interviews grow on trees, do you?

  • avatar
    portico

    Does anyone know the key reasons why Mazda is struggling so bad? I have always found their products( own a CX 9 AWD)to be just as good as Honda and Toyota but at a cheaper price.

    • 0 avatar
      Educator(of teachers)Dan

      In saltier climates there have been rust issues (especially with the Mazda 3). I would contend that Mazda is not doing well because it’s actually building the cars enthusiasts want. I’m seriously considering hunting down a Mazda 6 hatch with the V6 and 5 speed manual for my next vehicle. I’ve also seriously considered the RX8 (if not for the crapy fuel economy of the sucker for it’s relative amount of HP.) I’m also trying to convince my soon to be wife that she ought to test drive a Mazda 5 (when the kids start to arrive) with the manual cause of her love of manual transmissions. And let’s not forget the Miata, the darling of people who like tight handling and guys who remember British roadsters.

      Basically Mazda doesn’t build boring Toyota stuff so therefore they suffer.

      • 0 avatar

        Dan — Good luck on your search! If you find a 6 hatchback, by all means get the stick shift if you can… but don’t ignore the auto, particularly the 6-speed (2006 and above.) The manumatic is surprisingly decent when tap-shifted, with much quicker responses and more eager downshifts than others I’ve experienced.

        (Also, take a gander at a 4-cylinder/5-speed manual. There isn’t very much real performance difference compared to the 6-cylinder, and the mileage is much better.)

      • 0 avatar
        Jimal

        Are you in fact married to my wife? I’m working on talking my wife into a Mazda5 with a manual because of her love of manual transmissions. She’s driving a Passat wagon now and seriously misses her Jetta TDI with the stick (which I am now driving). Hmm, perhaps I can work out some sort of swap so that she gets her Jetta back, I get the Passat, then trade it in for a Speed 3 or something. I’m a long-time Volkwagen guy but I do like Mazda as well.

      • 0 avatar
        Zackman

        Mazda keeps extending “secret” warranties on the RX-8 because of ongoing engine “issues”. At least that’s what I’ve been told where we bought our MX-5. True or not, I can’t prove except what I have read on various forums.

      • 0 avatar
        Robert.Walter

        I was thinking about looking up all those old Mark Fields quotes from the time he was CEO of Mazda, and taking credit for the then new, and now current, Renesis rotary engine. I’m sure I never read him saying anything about future problems with the engine leading to secret warranty extensions! But why bother…

      • 0 avatar
        Demetri

        Mazda officially extended the warranty on the Renesis to 8 years, 100k miles. I don’t know if there have been any other unofficial extensions.

    • 0 avatar
      mazder3

      Why is Mazda struggling?

      1) Their advertizing stinks. They never seem to advertize for product other than the 3. Ask the average person on the street what a Mazda5 or CX9 is and they will be clueless.

      2) Their dealer network is small.

      3) Ford cast them off. No more sharing of platforms or engines.

      4) Their lease deals aren’t that great.

      • 0 avatar
        lzaffuto

        I have had Hondas, Toyotas, Nissans, and Ford cars as well as my Mazdas. The Mazdas have had the most problems of any of those. I have had 3 Mazdas, two Miatas and a 3 hatchback. I loved how all of them drove and what they stood for versus plain vanilla car companies. All three had constant, annoying problems. 1999 Miata had A/C compressor failure, egr sensor failed emissions 2 times, was cleaned both times and finally replaced, at 84k miles developed rod knock and sold. 2006 Miata egr sensor failed at 50k miles, front suspension assy failed 61k miles, sold. 2006 Mazda3 passenger motor mount failed 51k miles, thermostat failed 63k miles, A/C compressor started to fail at 69k miles, sold. Three strikes I’m out. I won’t try them again for a long time.

      • 0 avatar
        mazder3

        Aw, crud, scratch #1 from my list. People viewing “The Soup” at 10pm EST got to see an ad for the CX line.

      • 0 avatar
        Jacob

        Besides, some of the existing dealerships are not up to the standards of say Toyota or Ford and many are struggling to cope with demand. The other day I went out of my way to find a Mazda dealership here in San Antonio to check out CX-7. The whole dealership looked like it was built on a remodeled 7-11 store site and its parking lot. The place was overflowing with customers, but salesperson offices looked like Silicon Valley start-up cubicles and everything looked crammed inside.

      • 0 avatar
        th009

        The Ford divorce is not a good thing for Mazda, but it should not be affecting sales at this point yet.

    • 0 avatar

      lzaffuto:

      On my 2006 Mazda 3, the passenger motor mount failed 3 times and was replaced under warranty, regardless, after 66k miles I replaced it with 2011 Hatch, I could not find any other car that would give me so much fun for that amount of money, I did test drive the 2012 Focus and could not stand the ridiculous behavior of the A/T.

  • avatar
    russification

    now your speaking car

  • avatar

    If they tell you that Mazda put a smile on your face, believe it, you open the door and the screen reads “ZOOM ZOOM”, you turn the key to ON and it reads “hello” with the zoom zoom sound, then, you drive, all the cars around you look stupid, specially the ones that cost as much as your car, then, when you turn the ignition off it reads “Good Bye” and you smile again.
    What can I tell you, as much as I want Mazda to succeed I’m happy to know that I drive a car that is not mass market, you can always find it in a sea of other cars in that parking lot.

  • avatar

    I love my Mazda, and I consider myself a fan of the company… but I’m not blindly fanatical about it. If Mazda can’t find a sufficient market for the products it chooses to build, then it probably should go away.

    Such is life, except when bailouts are involved.

  • avatar
    SV

    Mazda’s one of my favorite car companies, and I drive a 2005 Mazda3 that I like alot, so I want to see them do well.

    I’m looking forward to both Skyactiv and the new styling theme. I probably wouldn’t get a new 3 because that grinning face turns me off, while the new Focus is more fuel-efficient, quieter inside, and more solid-feeling – and coincidentally, fuel efficiency, noise, and solidity over bumps are the qualities I most dislike about my car (I imagine those complaints still apply to the current 3 to some extent seeing as it’s basically a reskin of the first generation).

    • 0 avatar
      rudiger

      I probably wouldn’t get a new 3 because that grinning face turns me off

      That bizarre, Joker-grin, characture of a grille that Mazda decided to plaster across their model line certainly isn’t helping their cause any.

      The sooner they’re rid of that little styling faux pas, the sooner their fortunes will reverse.

    • 0 avatar
      cugrad

      I’m in the same boat as you. I will be replacing my 2005 Mazda3 in a few years, and I would strongly consider another Mazda3 if and only if they change their horrendous current styling.

    • 0 avatar
      TrailerTrash

      PLEASE…now look what you did.

      Once again, here comes all the anti smile crap.
      In fact. Mazda is selling well.
      In fact, other than the auto brilliant minded reviewer sights, people ARE buying the 3 with its look.
      So forgetaboutit.

      Their problems are coming not from lower sales but supply, financial and scale issues.
      Competition today is getting better pricing on stock and supplies due to large power purchasing.
      Mazda doesn’t have this.
      They will need to have something special work for them to be a large player and survive.
      They will need to have so much control of a niche car or segment to keep away any competition….
      Or they will need another big brother like Ford to help with purchasing and R&R cost.

      Mazda has always bosted about its drive for lighter designs and more efficient engineering.
      Maybe the new Sky tech is this.

      They had better master this, and soon.

  • avatar

    Good luck to them.

    My Mazdaspeed6 was their flagship car in 2007. It was half-baked at best. After repeatedly poor service at two different dealerships (the closest of which was almost an hour away), virtually no parts available to indy mechanics (meaning you’re locked into the dealer for service), and a constant stream of stupid part failures that kept requiring me to go back to the dealership (wheel bearing and control arm bushing failure with less than 40k miles), I cut my losses and moved on.

    I love the MX-5, but aside from that I’ll NEVER own another Mazda.

  • avatar
    richeffect

    I picked up a 2007 RX-8 with 37k miles on it in April and I still have yet to wipe the grin off my face. I autocrossed it just last week and I can’t wait to do it again. I know this car has poor mileage but there is nothing else like it on the road. I’ve come to expect reliability after having owned various Hondas and Toyotas but I am really keeping an eye on this baby. The only problem thus far has been a failed gas cap ($30). After having gone to hell and back with a Porsche 944 for 12 years, I’ve come to learn that reliability can be a two-way street. Check the oil often, stay current with maintenance, and don’t over-abuse. Looking forward to many more years of happy use.

  • avatar
    KitaIkki

    If SkyActiv works as well as advertized, then Mazda should have no problem returning to profitability. Mazda has always built nice but thirsty cars. SkyActiv should change that. If Mazda3 gets better MPG than the Civic, there is no reason to buy the Civic.

  • avatar
    ChuckFL

    I convinced my Dad to purchase a Mazda3 in 04′ when they came out. We both really liked the way the Mazda looked and drove. The price loaded (sans NAV) seemed to be a good value as well.

    But as others have mentioned It does not seem like the long term quality is there yet. At 51K the A/T transmission failed. Also had the rust issues on the door bottoms, and wheel arches. Mazda would not do anything under warrenty because it did not rust through.

    Sold the car last year and I could not get him to consider another Mazda for his next car.

    On a diffrent note, as a long time Saab owner and enthusiest I have always felt/looked at Mazda as a japanese Saab. I have always just liked them. I hope that Mazda is able to stay afloat and keep offering great affordable cars!

  • avatar
    Robert.Walter

    One of the popular car mags said in the early ’90’s, just as Mazda pulled-back from their plan to launch the Amati luxury channel (these cars instead became 929 and Millenia), that Mazda’s problem is that “they are too big to be small, and too small to be big.”

    I’ve been many times to Mazda (and agree that the Mazda Museum is worth the visit, and the walk over to the production side to look down on the final assy line is also good – you will see several different car-types assembled on the same line) and although the Mazda team and the good folks of Hiroshima are really great and kind, Mazda still struggles from the small-big, big-small, conundrum.

    p.s. I just love the vid of the old-time engineers beaming with joy at the running of their 1st rotary, and the pics of the Cosmos zipping thru the big-curve of the test-track.

  • avatar
    Spartan

    I’ve said on Autoblog time and time again that Mazda was in trouble, and would get downrated into oblivion.

    Mazda is going by the way of Mitsu, just at a slower rate. Ford has cut ties and as far as I can tell, Mazda is prolonging the inevitible. The domestics are doing well, Hyundai/Kia is making a lot of progress, and Toyota/Honda are staying the course.

    There’s not a lot of marketshare for Mazda, a large niche brand that isn’t running on fat margins from their cars.

  • avatar
    L'avventura

    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.

    • 0 avatar
      James2

      I hope you are right. More importantly, I hope it all works out for Mazda.

    • 0 avatar
      TrailerTrash

      thanks…

      well done and very interesting…and informative.

      thanks again.

    • 0 avatar
      WheelMcCoy

      @L’avventura

      +1. Insightful with some hope. Mazda makes affordable fun and I am rooting for them.

    • 0 avatar
      Robert.Walter

      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.

  • avatar
    geo

    The music in the ad was fantastic.

  • avatar
    geozinger

    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.

  • avatar
    Syke

    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!

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