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Japan:Mazda reports better profits on strong sales in Europe

Mazda reports better profits on strong sales in Europe

By Yuri Kageyama / AP Business Writer

TOKYO -- Japanese automaker Mazda Motor Corp. reported Thursday stronger profits for the fiscal year ended March as solid European sales and better profitability in North America offset losses from a fire at a Japanese plant.

The Hiroshima-based manufacturer, 33.4 percent owned by Ford Motor Co., posted group net profit of 45.77 billion yen ($432 million), up 35 percent from 33.9 billion yen a year earlier. The result was a record high for Mazda.

Mazda did not break down quarterly earnings.

Mazda's sales for fiscal 2004 dipped 7.6 percent to 2.7 trillion yen ($25 billion) from 2.9 trillion yen. But that was because of a change in the way overseas affiliates booked sales. Excluding that, Mazda's sales grew 4.7 percent on an annualized basis, according to the company.

The results were better than what Mazda had forecast after a fire broke out at a paint shop at one of its plants late last year, reducing production by thousands of vehicles. Mazda boosted production at two other plants to maintain overall vehicle production in Japan. Paint operations at the plant resumed in April.

Mazda, which has gradually turned itself around under a partnership with Ford, is expecting better news for the fiscal year through March 31, 2006, forecasting profit to climb 20 percent to 55 billion yen ($520 million) on sales of 2.84 trillion yen ($26.8 billion), up 5 percent from the year just ended.

Mazda's solid earnings come as Japanese automakers Nissan Motor Co. and Honda Motor Co. also reported record profits for the fiscal year. Toyota Motor Corp. reports earnings next month, which are also expected to be robust.

Those results contrast with the recent dismal showing from U.S. automakers General Motors Corp. and Ford.

Mazda expects vehicle sales to expand by 7 percent in fiscal 2005 to 1.178 million vehicles, on continuing demand for its models, such as the Mazda3, Mazda5 and Roadster, which will roll into showrooms in key global markets during the year.

The bullish outlook for Mazda comes at a time when the industry is expected to face tough times because of rising steel prices, higher U.S. interest rates and energy costs, as well as intensifying competition among the automakers.

Ford and Mazda have had a partnership for more than 20 years, which was strengthened in the 1990s. The companies work together to develop products and technology and share key parts for cars, all effective to cut costs.

Chief Executive Hisakazu Imaki acknowledged he was worried about the steep rise in steel costs.

"Though Mazda is growing steadily, we should not be satisfied yet," he said. "We must stay the course even more resolutely."

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My next Ford.....
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