TOKYO -- Mazda Motor Corp. has followed Japanese rivals in cutting full-year earnings forecasts in response to the global credit crunch and unraveling U.S. market.
Mazda now expects operating profit of ¥90.0 billion ($833.3 million) for the fiscal year ending March 31, down from an earlier forecast of ¥115.0 billion, the company said today. The new goal represents a 44.5 percent plunge from last year.
Mazda also expects net income to fall to ¥50.0 billion $463.0 million), or by $185.2 million more than anticipated. That target would be a 45.6 percent tumble for the full fiscal year.
In announcing earnings for the July-September fiscal second quarter, CEO Hisakazu Imaki blamed the revisions on the imploding U.S. market. Mazda will embark on a cost-cutting campaign in the second half of the fiscal year and reduce production in Japan to ease the pain, he said.
Mazdas gloomy prognosis came after similar downward revisions in operating-profit forecasts by Japanese counterparts Honda Motor Co. and Mitsubishi Motors Corp.
For the fiscal year, Mazda expects retail sales to climb 3 percent to 1.405 million vehicles. But that is about 75,000 units short of the companys previous forecast.
Supporting the increase will be a 13 percent sales advance in Europe to 370,000. But U.S. sales are forecast to drop 5 percent to 280,000, the company said.
In the second quarter, Mazdas operating profit fell 20.0 percent to $300 million. Net income declined 45.0 percent to $134.3 million.
Vehicle sales in the period grew 2 percent to 343,000.
Meanwhile, Imaki said today he did not expect any change in the Japanese automaker's relationship with Ford Motor, amid reports that the struggling U.S. automaker would sell part of its controlling stake.
"We've had a relationship with Ford since the 1970s," CEO Hisakazu Imaki told a news conference.
"Our ties are so close that you can't tell how much of the company is Mazda and how much of it is Ford. We don't expect that there will be any change in this relationship."
Reuters contributed to this report