While many automakers struggle with shrinking profits amid the serious economic slump, Mazda Motor Corp. is reaping the fruits of desperate cost-cutting efforts. On Thursday it reported consolidated midterm net profits for the first time since fiscal 1991.
The figure stood at 8.5 billion yen, up 18.2 billion yen from the same period last year. The firm now projects a net profit of 32 billion yen for fiscal 1998 -- the first net profit since 1992.
Mazda's unit sales declined only 3.3 percent during the first half of the fiscal year -- compared to 8.3 percent industrywide -- and profits improved.
Robert L. Shanks, Mazda's managing director, called it an "extremely important message" from the midterm financial results, stressing the company's significant improvement in its cost structure.
On a nonconsolidated basis, midterm operating profit was 21.7 billion yen, up 203.4 percent, the pretax profit was 18.8 billion yen, up 262.7 percent, and net profit was 5.5 billion yen, up 892.8 percent from the corresponding period of the previous year.
Mazda has reduced auto manufacturing costs by 220 billion yen over four years, the main element that pushed the company back in the black.
Takashi Yamanouchi, Mazda's managing director, said the cost reduction was achieved through thorough reviews of design and procurement of auto parts, as well as an increase of imported parts and reduction of the number of parts.
The company now projects an annual domestic sale of fiscal 1998 at 328,000 units, which represents a market share of 5.8 percent, or a 0.7 point increase from the previous fiscal year.