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Old 04-05-2013, 09:16 AM   #1
warpath
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Default Mazda calling for first annual profit in five years

Leftlane: http://www.leftlanenews.com/mazda-ca...ive-years.html



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With nearly 80 percent of its production capacity located in Japan, Mazda lives and dies by the yen – meaning that the currency’s recent plunge has the potential to dramatically reverse the automaker’s once-flagging fortunes.

In what could be a sign of things to come, Mazda has announced that it is projecting a profit of $279 million for the fiscal year that ended to March 31. If that prediction proves accurate, it would represent Mazda’s first year in the black since 2007.

Mazda will likely report its earnings at the end of the April.

The yen’s decline to its lowest value in 3 ˝ years means that Mazda has an opportunity to widen its gains in 2014, analysts believe.

"As long as the yen stays at around 90-95 against the dollar, Mazda's profits could double in the fiscal year to March 2014," Koji Endo, an analyst with Advanced Research Japan, told Automotive News.

In case the yen doesn’t cooperate, Mazda has taken steps to guard against the currency’s effects. A new plant in Russia – one of the automaker’s largest markets - opened last year, and another new facility in Mexico should be up and running by 2014.
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Old 04-05-2013, 09:55 AM   #2
WRXHillClimb
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So dropping the baseball team was a good decision

I'd like to say they would be better off making an assembly plant here, but the Americans are too proud to admit even when they do unskilled labor that they deserve a less-than-ideal life style.

Everyone born here deserves a 2 car garage, 3 bed, 2 bath, nice lawn house equipped with 42" tv, apple everything, and free healthcare, because reasons.
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Old 04-05-2013, 10:26 AM   #3
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Originally Posted by WRXHillClimb View Post
So dropping the baseball team was a good decision

I'd like to say they would be better off making an assembly plant here, but the Americans are too proud to admit even when they do unskilled labor that they deserve a less-than-ideal life style.

Everyone born here deserves a 2 car garage, 3 bed, 2 bath, nice lawn house equipped with 42" tv, apple everything, and free healthcare, because reasons.
I don't know about the 2 car garage or the nice lawn. But i've seen everything else among people on government assistance.
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Old 04-05-2013, 10:30 AM   #4
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they have to keep their voters happy...

aaaaaaaand back on subject,

Good for you mazda turning things around. Product rules (but does not hurt when the currency is back in your favor)
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Old 04-05-2013, 12:33 PM   #5
Eyeflyistheeye
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Mazda dug themselves out of a hole in the right way by delivering superior products.

I hope that they live and prosper.
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Old 04-05-2013, 12:57 PM   #6
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German auto workers get paid at least as well as the UAW workers, and they have a far better social safety net as well. And yet, the Germans are capable of running a highly profitable auto industry.

If your economy depends almost entirely on exports (like, say, S. Korea), then one could argue that there isn't much harm (to your business) to underpaying your workers as they are not your market. But if you depend on a large domestic market, overall high wage level among working class people is also what increases the private sector spending. In an economy, your spending is my income and my spending is your income. And the auto industry is big enough of a player that it cannot act like its actions won't have an economic feedback to come back and bite it.

Obviously there are right balances to everything, and one can go too far in any one direction, but the idea that anyone just "knows" what the correct standard of living should be for such and such workers, and therefore be able to judge if they are overpaid or not is just crazy, especially when there are international and historical counter examples. It all depends on the details.
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Old 04-05-2013, 01:12 PM   #7
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Quote:
Originally Posted by Len View Post
German auto workers get paid at least as well as the UAW workers, and they have a far better social safety net as well. And yet, the Germans are capable of running a highly profitable auto industry.
The cost is far lower since health care costs are far lower in Germany. Everything here aside from the health care industry is hampered by us having the highest healthcare costs in the world.
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Old 04-05-2013, 01:22 PM   #8
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Some would say you get what you pay for. When leaders of other countries come here for treatment it sort of validates that.

Even with that true, our healthcare costs are still out of control. And the current system has done nothing to stop that, Obamacare has done nothing to stop it.

To be honest, I have no idea how to really fix the situation. But none of that has anything to do with Mazda.
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Old 04-05-2013, 02:00 PM   #9
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Some would say you get what you pay for. When leaders of other countries come here for treatment it sort of validates that.
That just means that you can get stellar care in the US if money is of no concern. It doesn't mean that the cost/benefit ratio makes sense, or that you get what you pay for.

In any case, arguing over labor costs is pretty silly when it comes to car manufacturers, because assembly labor only makes up ~5% of the cost of a car. It's a bit like suggesting that you can fix a failing restaurant by slashing the napkin budget.

Mazda has a number of problems:
-Lack of partners
-Lack of scale
-Meager presence in high growth markets
-Too dependent on the Yen
-Lack of high margin products (no luxury division, virtually no cars over $30k)

If you're only competing in the bread-and-nutter segment in mature markets, with companies that are several times your size, you're probably not gonna be very profitable.
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Old 04-05-2013, 04:20 PM   #10
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Originally Posted by bal00 View Post
If you're only competing in the bread-and-nutter segment in mature markets, with companies that are several times your size, you're probably not gonna be very profitable.
That about sums it up. They need to carve up a better niche than mainstream cars with crappier interior and superior chassis. I love Mazdas, but I am not at all shocked that they don't sell all that well.
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Old 04-06-2013, 09:33 AM   #11
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Originally Posted by WRXHillClimb View Post
I'd like to say they would be better off making an assembly plant here, but the Americans are too proud to admit even when they do unskilled labor that they deserve a less-than-ideal life style.
They have one here that they share with Ford, in Michigan south of Detroit. They built the Mazda Mx-6, 626, and 6 there. It's the same plant that Ford builds the Fusion and Mustang in now. Recently Mazda stopped making the 6 there and I believe they make it in Mexico now. I think they still have some ownership of the plant though.

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Originally Posted by bal00 View Post
-Lack of high margin products (no luxury division, virtually no cars over $30k)
They tried that. The intended Amati luxury division never got off the ground in the early 90s, and so Mazda was left with a luxury car they didn't know what to do with (sold as the Mazda Millenia). They also tried to go upmarket with the Rx-7 and Cosmo and nobody bought them for various reasons. They closed the Efini and Eunos badges in Japan too. They're pretty much at a "back to basics" kind of business strategy.

They could try going down that high-margin road again but I'm sure there's a long memory in the company of past disasters.
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Old 04-06-2013, 10:38 AM   #12
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Mazda makes a great product for the money, glad to see them turning things around.
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Old 04-06-2013, 12:08 PM   #13
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Originally Posted by arghx7 View Post
They tried that. The intended Amati luxury division never got off the ground in the early 90s, and so Mazda was left with a luxury car they didn't know what to do with (sold as the Mazda Millenia). They also tried to go upmarket with the Rx-7 and Cosmo and nobody bought them for various reasons. They closed the Efini and Eunos badges in Japan too. They're pretty much at a "back to basics" kind of business strategy.

They could try going down that high-margin road again but I'm sure there's a long memory in the company of past disasters.
They may have just missed the boat. The other Japanese manufacturers had already launched their luxury divisions, there was a recession going on when Mazda made their move, and these days they don't really have the capital to launch a luxury brand.
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Old 04-06-2013, 06:18 PM   #14
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Originally Posted by Eyeflyistheeye View Post
Mazda dug themselves out of a hole in the right way by delivering superior products.
Such as? Mazda makes fun handling cars but I've rarely seen a Mazda that actually ages well. Mexican assembly isn't going to help their middling reliability.
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Old 04-06-2013, 10:46 PM   #15
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Freedom from Ford working wonders.
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Old 04-07-2013, 02:37 AM   #16
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Such as? Mazda makes fun handling cars but I've rarely seen a Mazda that actually ages well. Mexican assembly isn't going to help their middling reliability.
I don't know man. I see a lot of first gen Mazda3 on the road, and they look no worse than the Civic from the same era. Granted we owned one so I'm a bit biased, but I think that and the Miata are good examples of competitive products from Mazda that are also aging ok.
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Old 04-07-2013, 03:27 PM   #17
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Such as? Mazda makes fun handling cars but I've rarely seen a Mazda that actually ages well. Mexican assembly isn't going to help their middling reliability.
I have to strongly disagree with that statement. RX-7 FD is still one of the best looking cars ever made. As the guy above mentioned, their plebeian stuff always looks good a few years old too.
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