November 1, 2019 / 2:43 AM / 16 days ago

Mazda braces for 30% FY profit drop on falling car sales in U.S., China - Nikkei

TOKYO, Nov 1 (Reuters) - Mazda Motor Corp is facing a drop in annual profit of about 30% as the Japanese automaker struggles with falling sales in the United States and China, its biggest markets, the Nikkei newspaper reported on Friday.

Japan’s fifth-largest automaker expects to post about 60 billion yen ($555.4 million) in operating profit for the year ending March, falling from last year’s 82.3 billion yen to a seven-year low.

The updated forecast would be almost half the automaker’s previous profit forecast of 110 billion yen.

Mazda said that while the Nikkei report was not based on any announcement made by the company, it anticipated a profit revision largely in line with the figure stated in the report, which would be its lowest since the 2013 financial year.

It will make an announcement alongside its financial results for the July-September quarter later in the day.

Demand for Mazda vehicles including the Mazda3 sedan and the CX-5 SUV crossover has slumped since the company posted record annual sales of about 1.6 million vehicles in the 2018 financial year.

Global automakers have been grappling with a broad-based sales slowdown, as a trade war between Washington and Beijing and slowing growth in China have cut demand for cars in the world’s top two economies.

The slowdown comes as carmakers must invest heavily in electric cars, autonomous driving technologies and ride-sharing services to survive a market shift away from car ownership.

$1 = 108.0200 yen Reporting by Naomi Tajitsu, Chris Gallagher and Bangaluru newsroom; Editing by Stephen Coates

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