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Strong yen and poor US sales hit Mazda

MAZDA Motor Corp said yesterday that it expects a loss for the fiscal year, as the car maker braces for brutal results over the fourth quarter from the strong yen and plummeting sales in the United States.

Japan's fifth-largest auto maker lowered its forecast to a 13-billion-yen (US$144.4 million) net loss over the fiscal year through March, down from its previous forecast of a 50-billion-yen profit. It slashed its sales target 15 percent to 2.55 trillion yen from 3 trillion yen.

The maker of the RX-8 sports car and Miata roadster said it expects deeper losses over the January-March quarter as revenues from the US continue to fall.

In last year's October-December quarter, the company said it booked a small loss of 600 million yen, down from a 15.9-billion-yen net profit a year ago. Revenues tumbled 40 percent to 512.4 billion yen.

The US is Mazda's biggest market, and sales there are plunging as some consumers cut back on new purchases and others are unable to buy because of tightening credit conditions. The cars it does sell generate less profit because the strong yen means that sales abroad are worth less when converted back into yen.

The company also said rising material costs are hurting its bottom line.

In a breakdown of its quarterly operating profit, which reflects core business performance but excludes taxes, dividends, asset sales and other items, the firm said the rising currency chopped off 42 billion yen, while declining sales cut 34.1 billion yen.

That helped weigh Mazda down to an operating loss of 24.2 billion yen for the quarter, versus a 35.3-billion-yen profit a year earlier.

Like other car makers, Mazda has seen its sales in the US reverse in recent months.


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