Mazda Sales Zoom, Yet Operating Profits Crash

Mazda is the next in a growing list of companies to report massive losses after quarter 2 earnings reports dropped. While not nearly as devastating as the loss of Facebook, Mazda took a hard nosedive of 17 percent in operating profit. Despite their aggressive approach to cutting costs for production, the car manufacturers were hit hard by the foreign exchange rate losses and U.S. retail network reforms.

Earlier in July, Mazda was forced to recall 270,000 units from their 2003-2008 models due to a defect in Takata airbags. There was a potential danger for the airbag to explode with enough force that shrapnels could project into the driver and passenger, which certainly did not help with the brand’s reputation or costs. This event could have been a leading factor in profit loss for this quarter as well.

With the new Mazda 6 Sports Sedan on its way to consumers, hopefully the company will be able to rebound, making quarter 3 at least a tad more successful. Mazda is Japan’s fifth largest car manufacturing brand, but their U.S. sales are taking a hit due to the continued discounting of cars in the current state of the market. Despite the number of units being sold on the rise, the fact that they’re selling for less has made for a more impactful decline.

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6 years ago
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