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Given its recent history, it’s almost unimaginable thatfinds itself on track to report a ¥45 billion profit for the fiscal year ended March 31 and, if analysts are correct, set to double earnings for fiscal 2013 and possibly triple them in 2014.
Russian President Vladimir Putin (left), Takashi Yamanouchi celebrate start of car assembly at new 50-50 Mazda Sollers JV plant in Vladivosok last September.
Mazda Introduces SkyActiv
The first two of eight SkyActiv models introduced to the market have been well-received by consumers. SkyActiv is’s trade name for a series of technologies, mostly involving conventional powertrains, developed to boost fuel economy and engine output.
The CX-5 cross/utility vehicle launched in February last year won Japan’s Car of the Year honors in December. And based on early reviews of the Mazda6, the stylish car (sold in Japan as the Atenza) could be another contender.
More importantly, Yamanouchi reports the auto maker cut ¥150,000 ($1,520) in cost from the sedan’s and CUV’s predecessors, in the case of the CX-5, the CX-7. Both new models can be exported profitably at $1:¥77 and €1:¥100.
When the first-generation Mazda6 debuted in 2002,indicated the car would be profitable at $1:¥95 levels.
Chris Richter, senior analyst at CLSA Asia-Pacific Markets, says Mazda “is the most tenacious in the world doing what they do with so little,” meaning it limited cash reserves. The auto maker’s debt-to-equity ratio still stands at 102%.
Still, CLSA is forecasting a ¥112 billion ($1.1 billion) operating profit in the fiscal year ending next March. Goldman Sachs Japan’s fiscal-2013 forecast is ¥120 billion ($1.2 billion), while J.P. Morgan is projecting ¥105 billion ($1.1 billion). And that is with only half of new SkyActiv models on the market.
Mazda posted its largest-ever profit in fiscal 2007, six months before the Lehman Brothers bankruptcy.
Yamanouchi declines comment on the exchange-rate breakeven point for other SkyActiv models in the pipeline, including upgrades to the Mazda3/Axela and Mazda2/Demio, other than to say the auto maker has adopted the same design philosophy.
He also advises a rotary car will not be among the eight new models, downplaying speculation the rotary engine’s revival is imminent. Mazda phased out the RX-8 last June. He does confirm the engine is alive and well but probably will not be put into a product program until after the midterm business plan is complete, likely after March 2016.
“I am aware that the rotary is an iconic engine for us, and it clearly falls under the general umbrella of our ‘Zoom-Zoom’ concept, as it offers enormous driving fun,” Yamanouchi says. “But it is not an environmental engine, which is the centerpiece of our SkyActiv strategy.”
Mazda, which unveiled its SkyActiv powertrain lineup at the 2009 Tokyo Motor Show with prototype gasoline and diesel engines and a compact 6-speed automatic transmission, aims to boost fuel economy an average 30% by fiscal 2015.
The engines, in particular the clean diesel, have been well-received, and the auto maker since has added a 6-speed manual transmission, stop/start, a micro-hybrid device using regenerative braking energy and a capacitor to power air conditioning and other electrical components.
All of these systems are available on the new Mazda6.
The next step in SkyActiv technology? “Probably lean-burn,” Yamanouchi says.
He does not say whether Mazda’s first hybrid, due in early 2014, will be among the eight SkyActiv models, but stresses the car will combine the auto maker’s SkyActiv technology with’s hybrid technology. The model will be sold only in Japan.
Yamanouchi also declines to discuss plans for advanced powertrains technologies and whether, for instance, Mazda might joinand in fuel-cell and lithium-ion battery development or if and when it might introduce a plug-in hybrid.
But he clearly does not believe focusing on conventional powertrains, as Mazda has done through its SkyActiv strategy, will handicap it from reaching post-2016 emissions standards when cars sold in the U.S. are expected to boost fuel economy from 34.5 mpg (6.8 L/100 km) to 54.5 mpg (4.3 L/100 km) in 2025.
The Mazda6 XD, powered by the auto maker’s 2.2L SkyActiv diesel, gets 52.7 mpg (4.5 L/100 km) under Japan’s JC08 test mode, only 2.4 mpg (1.02 km/L) less than the slightly larger Toyota Camry Hybrid and 8.9 mpg (3.8 km/L below the slightly smaller Prius V hybrid.
“Many market forecasts expect electric vehicles to comprise only 3% of global auto demand (by the end of the decade), which means, assuming demand grows to 100 million units, 97% of cars, including an estimated 10 million hybrids, will still use internal-combustion engines,” Yamanouchi says.
“That’s where our main focus will be.”