TOKYO -- Mazda Motor Corp. forecast a 16 percent fall in operating profit this year as it takes a hit from a stronger yen and supply chain disruptions after the March 11 earthquake.
Mazda forecast a net profit of 1 billion yen, swinging from a 60 billion yen loss last year.
The operating profit forecast of 20 billion yen ($248 million) for the year ending March 2012 is better than the average 5.66 billion yen estimate in a survey of 21 analysts by Thomson Reuters I/B/E/S.
To seek growth in emerging markets, the Japanese automaker unveiled plans Friday to build a new factory in Mexico, confirming a Reuters report a day earlier.
Mazda said it would build a $500 million factory in the central Mexican state of Guanajuato with trading company Sumitomo Corp. It will begin production sometime between April 2013 and March 2014 and mainly serve Central and South America, Mazda said today.
Mazda will build the Mazda2 subcompact and Mazda3 compact cars, as well as engines, at the new site. The factory will have capacity to build 140,000 vehicles a year and employ about 3,000 at maximum capacity.
Mazda will own 70 percent of the joint venture plant, while Sumitomo will hold 30 percent.
The partners will also set up a sales company in the fast-growing Brazilian market, beginning operations during the business year starting in April 2012. The Brazilian unit will initially market and sell cars made in Japan and eventually add vehicles built at the new Mexico plant.
"These initiatives are part of Mazda's plans to achieve its mid- to long-term goals for emerging markets," Mazda CEO Takashi Yamanouchi said.
Like other Japanese automakers, Mazda needs to reduce its exposure to the strong yen, which makes exports more expensive and reduces the value of earnings made overseas when expatriated. Last year, it made more than two-thirds of its vehicles in Japan and shipped more than 80 percent for exports.
The factory in Mexico will be Mazda's fourth overseas plant after the United States, China and Thailand -- all held jointly with former top shareholder Ford Motor Co.
Mazda said earlier this week it would pull out of a joint venture with Ford in Michigan when it transfers output of the Mazda6 sedan to Japan.