TOKYO — Mazda zoomed to record profits in its just-finished fiscal year, as U.S. customers snapped up crossovers such as the CX-90 and increasingly turned to higher-margin hybrids.
The Japanese yen's dramatic weakening against the dollar was also a big factor.
Cashing in on higher sales and the foreign exchange tailwind, export-dependent Mazda Motor Corp. booked all-time high operating profit and net income for the fiscal year ended March 31.
Mazda deliveries in the crucial U.S. market, the company's biggest and most important sales pool, reached a record 375,000 vehicles in the 12-month period, CEO Masahiro Moro said Friday while announcing his company's financial results in an online briefing.
Operating profit at Mazda shot up 76 percent to ¥250.5 billion ($1.66 billion) in the 12-month period, while net income jumped 45 percent to ¥207.6 billion yen ($1.37 million).
Revenue advanced 24 percent to ¥4.83 trillion yen ($31.92 billion), as sales increased 12 percent to 1.24 million vehicles. The final sales total missed Mazda's earlier guidance of 1.29 million.
Robust sales of more profitable large-platform products, such as the CX-90, chipped in ¥125.2 billion ($804.6 million) to operating profit. The Japan-built CX-90 saw its U.S. sales mushroom to 9,984 vehicles in the January-March period, from just 287 the year before.
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Meanwhile, deliveries of the U.S.-made CX-50 soared 63 percent to 15,867. At the same time, Mazda added the new CX-70 just below the flagship CX-90, further spurring sales momentum.
Mazda, long famed for sporty small cars such as the MX-50 Miata or RX-8 rotary engine coupe, has moved itself up market and generated larger profits by shifting hard into crossovers.
Crossovers king
Today, about 89 percent of Mazda's sales in the U.S. come from its extensive lineup of crossovers — including the CX-30, CX-5, CX-50, CX-70 and CX-90.
Mazda now sells only two cars in the U.S., the Miata and the MX-3.
In Europe and Japan, Mazda offers two other crossovers based on its new large-sized platform, the CX-60 and CX-80. Those also come in electrified versions.
Moro has high hopes for the four crossover on that large-size platform.
"This platform has a very high quality with high potential. We plan to grow these models starting this year as all four of them are now ready," he said. "These products have high profitability."
Both the CX-90 and CX-70 come with a plug-in hybrid option, and Mazda is adding a hybrid variant of the CX-50 later this year. American customers are being draw to them as much for their power and drivability as for their fuel efficiency, Moro said.
"The perception of hybrids has changed, especially in the U.S.," Moro said. "As products, hybrids have higher power and are attracting a lot of attention as an alternative solution. Realistically, hybids are a good-fit solution for American drivers."
At the same time, Mazda is getting a big boost from foreign exchange rates. The weakening of the Japanese yen against the U.S. dollar and euro added another ¥53.5 billion ($343.8 million).
The exchange rate has been a boon for Japan's exporters because it makes their products more affordable overseas. The yen's implosion also inflates the value of dollar-denominated sales that are repatriated to headquarters in Japan and converted into yen.
More than half the vehicles Mazda sells in the U.S. are imported, including the top-selling CX-5 crossover. Over the past year, the yen has lost 14 percent of its value against the dollar.
Looking ahead to the current fiscal year ending March 31, 2025, Mazda expects global retail sales to climb 13 percent to 1.4 million vehicles. North America is seen powering the increase, as sales in the company's biggest, most important market advance 17 percent to 600,000 vehicles.
Deliveries in Europe are forecast to increase 2 percent to 183,000 vehicles.
Looking ahead
Mazda predicts operating profit will grow 8 percent to ¥270.0 billion ($1.74 billion), while net income falls 28 percent to ¥150.0 billion yen ($964.0 million). Volume and mix will drive profits higher, but Mazda forecast a strengthening of the yen against the dollar that will reverse much of the foreign exchange windfall gains that Mazda reaped in the just-finished year.
Higher raw material and logistics costs will also temper profit growth.
Mazda's appraisal came as it released earnings for the fiscal fourth quarter ended March 31.
In the January-March period, parent company operating profit surged 55 percent to ¥50.3 billion ($323.2 million). Net income increased 8 percent to ¥42.2 billion ($271.2 million) in the three-month period, as revenue advanced 12 percent to ¥1.26 trillion ($8.1 billion).
Mazda's global sales dipped 1 percent to 311,000 in the fiscal fourth quarter.
Naoto Okamura contributed to this report.
