Mazda reports profit jump on solid sales

The Japanese affiliate of Ford Motor Co. reported a 46.8 billion yen ($450 million; 285 million euros) profit for the quarter through March, up from 31.6 billion yen the same period the previous year.

Quarterly sales rose 1.2 percent to 969.5 billion yen ($9.3 billion; euro5.9 billion), partly on strong demand for the Mazda 6 in Europe, Mazda said.

Mazda, Japan's fifth-largest automaker, said it has boosted production at its main Japanese plants by 11 percent for a combined annual production capacity of 996,000 vehicles. As a result, production output in Japan for the fiscal year exceeded 1 million vehicles, the highest level in 15 years, Mazda said.

For the fiscal year through March 2008, Mazda recorded a 91.84 billion yen ($883 million; euro560 million) profit, up 25 percent on year -- a record for the company. Annual sales rose 7 percent to 3.476 trillion yen ($33.4 billion; euro21.2 billion).

"We are very pleased that we achieved record profits across the board," Mazda Chief Executive Hisakazu Imaki said.

For the fiscal year ending March 2009, the Hiroshima-based manufacturer of the Demio subcompact and the RX-8 sports car expects profit to decline 24 percent to 70 billion yen ($673 million; euro427 million) because of a stronger yen and higher raw material costs. A strong yen erodes the value of overseas earnings of Japanese exporters.

Still, Mazda expects global vehicle sales to climb 9 percent to 1.48 million vehicles in the fiscal year ending March 2009. It sold 1.36 million vehicles worldwide in the fiscal year just ended, up nearly 5 percent from the previous.

But Mazda expects the current fiscal year sales to decline 13.7 percent to 3 trillion yen ($28.8 billion; euro18.3 billion) because of the stronger yen and soaring raw material costs. Accounting changes are also expected to diminish sales, it said.

But the company was upbeat, noting that it planned a new passenger car plant in Thailand with Ford, where production will begin in 2009.

Ford has reported less rosy results lately. Despite a surprise profit of $100 million for the first quarter, the manufacturer, based in Dearborn, Mich., still expects to lose money this year as the U.S. auto market deteriorates.

Mazda shares gained 2.6 percent to $4.14 in Tokyo shortly before earnings were released.