Mazda sees profit surge in year ahead


Mazda president Mark Fields is returning to Ford later this year.

Staff and wires

TOKYO, Japan -- Japan's No. 5 carmaker, Mazda Motor Corp, sees healthy growth in Europe and Japan this year that will lead to a doubling of its profits, president Mark Fields said.

Fields, who will step down in a few months to return to a position with Ford Motor Co, told CNN growth in Europe would be about 11 percent this year, while Japan would grow about 6.5 percent.

But he warned that sales in the U.S. would be flat.

Mazda will release several new models this year, capping the biggest restructuring effort in its 82-year history.

Mazda reported Wednesday that its consolidated net profit was 8.83 billion yen ($68.72 million) for the year ended on March 31.

That was a remarkable turnaround from the previous year, when Mazda had a net loss of 155.24 billion yen ($1.2 billion).

Mazda's shares closed 4.42 percent higher at 402 yen Wednesday. They eased to 397 yen in early trade Thursday before recovering to 400 yen.

The carmaker's 2001-02 result was helped by cost cuts and a favorably weak yen.

Earnings per share in 2001-02 were 7.23 yen compared with a loss of 126.99 yen per share the previous year.

"This year will be one of growth and greatly increased earnings," Kiyoshi Ozaki, general manager of the financial services division, told a news conference, according to Reuters.

Estimates revised

Wednesday's results had been well flagged last month when Mazda, one-third owned by Ford, revised its estimates.

It also said last month that Fields, who has been president since December 1999, will step down in the northern summer to return to Ford. He will be replaced by Lewis Booth.

After spending much of the 1990s in the red, Mazda's six years of restructuring, including 2210 job cuts or 20 percent of its non-manufacturing workforce and the closure of one plant, appear to be bearing fruit.

Net profit this year is projected to surge 127 percent to 20 billion yen ($155 million) and operating income to leap 79 percent to 51 billion yen from 28.5 billion yen.

In addition to three new models -- the Mazda 6, the RX-8 sportscar and a remodelled Demio subcompact -- due to hit the market this business year, further cost cuts are expected to make a large contribution to earnings.

After initially setting a target of a 15 percent cost reduction over five years beginning in November 2000, Mazda said it could do better. The company now plans to cut overall costs by 20 percent over the next two to three years.

With the new models on the way, Mazda predicts global vehicle sales will rise 5.5 percent to 1.0 million this year.