Mazda posts $27M second-quarter operating loss

Falling global sales, suspended production, foreign exchange rates blamed for losses.

Mazda have reported a loss of ¥2.2 billion ($27 million) for the fiscal second quarter ended September 30.

Net income dropped 86 per cent to ¥3.8 billion ($47 million) during the the same period, with revenue holding steady at ¥856 billion ($10 billion).

Worldwide retail sales fell by 3.0 per cent to 392,000 units, with losses recorded in North America, China and Japan.

Mazda attribute the drop in sales to a production suspension triggered by flooding near its headquarters in Hiroshima.

The suspension meant Mazda lost production of 44,000 complete vehicles, and 23,000 kits destined for overseas production.

Increased investment in its US retail network, a focus of new CEO Akira Marumoto, took a financial toll to the tune of ¥5 billion ($62 million).

This investment is largely going towards an upgrade of Mazda’s American dealer network, along with preparation for a new plant in Alabama, to be shared with Toyota.

Other contributors to the loss include the appreciation of the Yen against the US dollar, increased costs related to compliance with European environmental regulations and recall-related costs.