Mazda, Mitsubishi see record annual profits, warn on Thailand

  • Business
  • Wednesday, 05 Feb 2014

TOKYO: Japan's second-tier carmakers Mazda Motor Corp and Mitsubishi Motors Corp are expecting record level profits buoyed by a weaker yen after years of being on the brink, but both warned about a slowdown in Thailand.

Mazda on Wednesday raised its annual operating profit forecast by 12.5 percent to 180 billion yen ($1.8 billion), in line with expectations and higher than the record 162.1 billion yen it booked four years ago before the Lehman crisis hit.

That would be more than triple the 53.9 billion yen operating profit it booked last financial year.

Japan's fifth-biggest carmaker also said it plans to resume dividend payments for the first time in four years. Mazda now plans to pay a dividend of 1 yen for this financial year that ends in March.

"We are seeing steady progress on structural reforms that we have been working on over the last few years," Mazda Chief Executive Officer Masamichi Kogai told a briefing.

The weakening yen has helped boost profits of Mazda, which makes about three-quarters of its vehicles in Japan and exports about 82 percent of that.

Mazda, which in the four years to March 2012 chalked up combined net losses of nearly 250 billion yen, has also boosted profit margins through a series of fuel efficient technologies, a revamped manufacturing process and stylish new designs.

It expects its annual operating profit margin to rise to 6.7 percent this financial year, from last year's 2.4 percent.

Mitsubishi Motors also said on Wednesday that its April-December nine-month operating profit hit a record 96.3 billion yen. It kept its outlook for record 120 billion yen in operating profit for the year to March.

One area of concern for both companies is Thailand, an export hub for Japanese automakers. Mazda has a joint venture with Ford Motor Co in Thailand where it manufactures cars like the Mazda3 and is also building a new transmission plant. Mitsubishi operates three vehicle plants in Thailand where it makes about a third of its global production.

Mazda cut its global sales outlook for the year to March by 0.7 percent to 1.325 million vehicles, citing problems in Thailand.

"We believe we are starting to see the impact of the current political instability (in Thailand). We think this could last until the middle of this year," Kogai said.

Mitsubishi also said it is seeing sales decline in the country but there has been no impact on production.

Earlier on Wednesday, Mitsubishi said its long-term president, Osamu Masuko, will become chairman in June and also take on the newly created post of CEO. Managing Director Tetsuro Aikawa will become president and also take on the new chief operating officer post. - Reuters

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