Mazda may lower China sales target
TOKYO: Mazda Motor Corp, Japan's most export-dependent carmaker, said the company may cut its mid-term China sales target after deliveries in the world's biggest car market fell for 17 straight months.
The company's plan for China sales to reach 400,000 units by the year ending March 2016 "may be revised", Masamichi Kogai, who was promoted to president in June, said in an interview last week. Hiroshima's biggest company is forecasting China sales to only reach 200,000 this fiscal year.
While no Japanese carmaker has seen a bigger turnaround - in terms of profits or share price - since the yen began weakening almost a year ago, Mazda has yet to emerge from its slump in China. After reshuffling top management in the country this year, Mazda is now betting that the locally produced CX-5 SUV and Mazda 6 will help spur a recovery.
"Mazda is switching to local production of their top models in China now, so once that kicks in, sales should pick up," said Koichi Sugimoto, an auto analyst at BNP Paribas SA in Tokyo. "Their products are improving, and the models they'll be introducing fall under the popular category in China too."
Mazda's sales in China have fallen 21 per cent in the first eight months of the year, making it among the worst performers.
Investors haven't been too worried. Mazda has surged fourfold in Tokyo trading since late October, when the historically strong yen began crashing - it fell 21 per cent to a four-and-a-half-year low against the dollar within six months. Before that, Mazda's heavy reliance on exports made the stock so unpopular that it was headed to be the worst-performing Japanese car stock for a second straight year.
Mazda's not alone in struggling in China. Sales at Japanese carmakers from Toyota Motor Corp to Honda Motor Co have yet to fully recover since a diplomatic row over a group of uninhabited islands fuelled a wave of anti-Japan protests a year ago. Even so, Mazda's slump predates the islands dispute.
By contrast, Mazda's sales in the US are picking up. Deliveries rose 26 per cent in August, helped by surging demand for the new Mazda 6 and the CX-5. Bloomberg