6 October 2009

… Mazda wants to hike R&D; forecasts smaller loss

If you call losing money good news, at least Japanese automaker Mazda expects about half the red ink it previously forecast for the fiscal year. This success comes from the rise in demand from “green” car incentives, company officials said. In addition, it will raise $1.1 billion to fund research and development.

Mazda Motor Corp. revised its forecast for the fiscal year through March 2010 to a $289.5 million (26 billion yen) net loss—about half the $556.8 million (50 billion yen) loss that Japan’s No. 4 automaker had projected in May.

Mazda also said it will issue new common stock later this month that will reduce former U.S. alliance partner Ford Motor Co.’s stake to 11% from 13.8%. The automaker will issue 460 million shares from October 14 to October 20, raising up to $1.1 billion (95.9 billion yen) for research and development into green cars and safety features.

In forecasting a smaller loss, Hiroshima-based Mazda said global sales for the fiscal year should be stronger by 55,000 vehicles, rising to 1.155 million, from the earlier forecast of 1.1 million, helped by strong sales of the its high mileage Mazda3, called Axela in Japan.

Mazda said it will return to profitability earlier than it had expected, by the July-September period. Initially, it had expected to stay in the red until the second half of the fiscal year, which runs from October to March.

Like other Japanese automakers, Mazda has been battered by the global slump.

Mazda said it expects $23.7 billion (2.13 trillion yen) in sales for the fiscal year through March 2010. It had previously expected $22.6 billion (2.030 trillion yen) in sales.