Mazda: SKYACTIV contributes to CX-5 and Mazda6 profitability

Company strives for overseas production ratio of 50% by FY2015



The All-new Mazda6 (Atenza)
The All-new Mazda6 (Atenza) fully equipped
with SKYACTIV technology
(exhibited at Detroit Auto Show in January 2013)

 Mazda posted net losses for four consecutive terms from FY2008-2011 due to the decline of global demand after the Lehman Brothers crisis in 2008 and the yen's high appreciation. During the years, Mazda challenged a number of initiatives that would help it produce profits while exporting from Japan (e.g. SKYACTIV technology, Monotsukuri Innovation and other structural reform plans as described in this and the related reports). Typically, the CX-5 (launched in February 2012) and the all-new Atenza (launched in November) achieved outstanding environmental performances and low costs that produced profits despite the yen's appreciation in 2012. These models, in particular, contributed to the increase in the company's sales and profits in FY2012. Mazda's consolidated operating profit for FY2012 is expected to improve by 83.7 billion yen from the previous fiscal year including, according to the company, 37.6 billion yen attributable to the market launch of the two specific models. As a result, the company is projecting the first net profit in five years (net profit of 26.0 billion yen projected as of February 2013).

 Although the yen's high appreciation is being corrected, the company intends to strengthen its business in emerging countries where demand is increasing, and strengthen its overseas production to build a stronger business infrastructure that is not susceptible to foreign exchange rates. The overseas production ratio was approximately 30% in FY2012. Mazda plans to increase its global sales volume to 1.7 million units in FY2015 with equal production quantities in Japan and overseas (850,000 units each). Mazda's knock-down production in Vladivostok Russia started in October 2012. The final approval, granted by Chinese government in November 2012 for restructuring Mazda's operation in China from a three-company joint venture into two separate joint-ventures, namely Changan Mazda Automobile Co., Ltd., and Changan Ford Motor Automobile Co., Ltd., will help Mazda increase production in China. Mazda will start production in Mexico in 2014 with annual quantity of 140,000 units and increase that to 230,000 in 2015. Mazda will start production of transmissions in Thailand in 2015 in an annual quantity of 400,000 units.

 Mazda intends to increase overseas footprints backed by the enhanced competitiveness resulting from SKYACTIV and Monotsukuri Innovation initiatives.

Structural reform plan to reinforce the framework for medium- and long-term initiatives

(1) Drive business innovation by SKYACTIV technology
(2) Accelerate cost improvement through Monotsukuri Innovation
(3) Reinforce business in emerging countries and reconstruct global production footprints
(4) Promote global alliances

Sources: Mazda's financial results 2012.2.2
(Note) Mazda's medium- and long-term outlook (for FY2015) included operating profit of 150 billion yen, rate of sales (ROS) of 6% or higher and global sales volume of 1.7 million units with assumed exchange rates of 77 yen to the US dollar and 100 yen to the euro.

Related report: "Mazda's innovative SKYACTIV and new manufacturing technology" (posted in April 2012)