Mazda’s weakness: Unstable financial status

Related to Mazda’s weaknesses, it could be said two kinds of that.

1. Unstable finance status.

2. Their indefinite position in the automotive industry.

Today, it will be dealt with the part of finance only in this article. Concerned with Mazda’s position, it will be written together with the Mazda’s image next time.

 

 

Finance: Under surrounding’s thumb

Mazda is one of the innovative automakers but seems to be in chronic financial problem. They were financially damaged from the oil crisis in the early of 1970 and then could narrowly be revived by aid of Ford in 1970s. Recently, Ford almost sold off Mazda’s share which they have possessed so it can be interpreted Mazda seems enough to be independent from Ford. However, Mazda has still unstable finance status. (In fact, the decision of Ford that sells the shares was probably come from global finance crisis in 2007 and Mazda was also influenced by it).

I would like to compare the condition of Mazda in 2012 and 2013 to explain Mazda’s unstable financial state.

Because of strengthening of the Japanese Yen in 2012, Mazda’s sales and shares fell down and their share prices was decreased by 8.2%, which was recorded the lowest that has been since 6th Feb in 2012. Even it dropped down by 9.9%. According to a news article, Mazda rely on exports rather than domestic so the damage was deteriorated.

In 2013, however, weakening of the Japanese Yen could make a profit to Mazda (maybe, because of Abenomics) so it is expected annual profit in 5 years. Interestingly, the sales of September in 2013 were soared up by about 45% compared with the September of last year. Masamichi Kogai, president of Mazda Motors Corporation, expressed it as ‘Unusual’. It is true that the new cars of Mazda which launched in this year had also influence on this increase but weakening of the Yen seems to play a key role.

Of course, this change is definitely positive signal for Mazda but the important point is that Mazda’s finance state seems to be easily controlled by surroundings. In 2011 to 2012, Mazda share was dramatically dropped but suddenly risen back to surplus. In other words, it would be said something unstable in terms of such as fund-flow or managing company. In addition, it is probably interpreted that the domestic sales is lack but fortunately, Mazda appears to ensure it. The report of sales from Mazda indicates that the domestic sales from June to September in this year seem to be stably increased.

Mazda’s domestic sales from Jan to Sep in 2013

(Source visualised the Mazda’s domestic sales from Jan t0 Sep in 2013 on Mazda official website)

 

 

 

<Bibliography>

Automotive News (2013). Mazda, aided by weaker yen, eyes first annual profit in 5 years. [Online] available from < http://www.autonews.com/article/20130404/OEM01/130409934/mazda-aided-by-weaker-yen-eyes-first-annual-profit-in-5-years#axzz2q668HXcI > [08 Nov 2013]

Mazda (2013). Mazda’s spectacular September sees sales soar 45 per cent. [online] available from < http://www.mazda.co.uk/aboutmazda/news/mazda-general-news/mazdas-spectacular-september-sees-sales-soar-45-per-cent/ > [07 Nov 2013]

Mazda (2013). Production and Sales. [Online] available from < http://www.mazda.com/publicity/release/2013/cat2.html > [07 Nov 2013]

MBASkool.com (n.d.). MAZDA [Online] available from < http://www.mbaskool.com/brandguide/automobiles/4558-mazda.html > [05 Nov 2013]

Servicing Stop Blog (2012) Mazda shares fall as their financial crisis worsens. [Online] available from < http://servicingstopblog.co.uk/general-knowledge/mazda-shares-fall-as-their-financial-crises-worsens/ > [07 Nov 2013]

THE WALL STREET JOURNAL (2011). Strong Yen, Weak Sales Hurt Mazda. [online] available from < http://online.wsj.com/news/articles/SB10001424052748703437304576121262184366624 > [08 Nov 2013]

THE WALL STREET JOURNAL (2013). Bracing for Worse, Mazda Enjoying Weak Yen. [online] available from < http://blogs.wsj.com/japanrealtime/2013/07/19/bracing-for-worse-mazda-enjoying-weak-yen/ > [08 Nov 2013]

 

 

 

If you found misinformation in this article, please write a comment.

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