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Mazda Hit By Not So Perfect Storm As Sales Decline Dramatically

Mazda sales decline,

Mazda has been hit with a slump in global demand. A number of factors are behind the dramatic fall in sales. Suspended production and risible foreign exchange rates are some of the pinch points. Mazda has also been revamping it’s US dealership network, the combination of all these factors has led to a perfect if rather unfavorable financial storm.

Mazda posted an operating loss in the second quarter of $19.4 million dollars. A year earlier the company posted an operating profit of $322 million dollars.

Retail sales declined by 3 percent to 329,000 units delivered worldwide in a three month period.

Net income fell 86 percent as Mazda recorded a three-month sales decline in key territories such as Japan, China, and North America.

Production was suspended when flooding and landslides caused by heavy downpours hit Mazda’s headquarters in July.

The  Fuchu, Hiroshima Prefecture, and a factory in Hofu, Yamaguchi Prefecture accounts for about 60 percent of Mazda’s total auto production.

Mazda lost a total of 67,000 vehicles as a result of the floodings. The biggest financial hit for Mazda has always been the exchange rate between the Japanese yen and US Dollar. That alone hit operating profit by $54 million dollars.

Under the current CEO, Akira Marumoto, growing and sustaining sales in the US territories is the number one priority. As it always has been.

Together with Toyota the automaker is building a joint production facility in the US state of Alabama. The $1.6bn dollar facility will open in 2021.

North American sales declined by 5 percent to 106,000 units sold in the three month period. European sales remained stable at 65,000 units delivered.

However Mazda expects to post a yearly operating profit fall of $615 million dollars. The company initially forecasted a 28 percent fall.

Overall the Japanese company forecasts a 1 percent decline in worldwide deliveries to around 1.62 million vehicles.



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