TOKYO -- Mazda Motor Corp. is ramping up crossover output to bolster profitability after recalls and higher car incentives undercut earnings in the latest quarter.
Mazda's operating profit tumbled 56 percent to ¥23.7 billion ($213 million) in the Japanese carmaker's fiscal fourth quarter ended March 31, the company said last week.
Outlays for quality issues were a big part of a $214.8 million hit to the bottom line, the company added. Recalls in the quarter included a callback of diesel vehicles in Japan and a global campaign to fix a car seat problem.
Worsening wholesale volume and mix lopped off $81.8 million.
Worldwide revenue advanced just 1 percent to $7.78 billion, as global retail sales inched ahead 1 percent to 397,000 vehicles in the fiscal fourth quarter.
While announcing the financial results, President Masamichi Kogai said incentives on sedans in the U.S. is intensifying and that he wants to further tilt the lineup toward more profitable crossovers.
In the current fiscal year, which began April 1, Mazda will increase global crossover production by 7 to 8 percent. That will partly reflect a global rollout of the redesigned CX-5 crossover and the introduction of a new three-row CX-8 crossover in Japan later this year. Mazda is adding CX-5 production at its Hofu plant in Japan to feed what it hopes will be growing demand.
"Compared with sedan cars, SUV models have higher profitability per unit, so I hope that will help increase our profits," Kogai said. "Increased capacity will generate growth."