Mazda's stock surges

Posted by: Ian Rowley on March 16, 2009

It’s been a miserable few months for Japan’s automakers and Mazda is no exception. On Mar. 3, its stock reached a three-decade low amid concerns over its finances. Like all Japanese automakers, Mazda has been hurting due to the strong yen and slumping global demand for cars. Last month, Mazda reversed projections for a profit and said it would join Toyota, Nissan and others and make an annual loss.

Since then, though, there have has been something of a rebound. By the end of last week, Mazda’s stock had risen 20% since the recent lows. On Mar. 13 it jumped 7.5% after the Hiroshima-based automaker said it would reverse some production cuts. Today, the stock surged again, gaining 8.4%, after Deutsche Securities raised its stock rating for the company to a “buy”. Deutsche’s Tokyo auto analyst Kurt Sanger notes that the company will benefit from the imminent introduction of the new Mazda3 following the launches of new versions of its other stronger sellers, the Mazda2 and Mazda6, in the last two years. The Mazda3, known as the Axela in Japan, accounts for about a third of Mazda’s global sales. “Much of the heavy-lifting for core models is behind it leaving Mazda better able to adjust R&D and capex without threatening its near-term competitiveness,” Sanger wrote in a note to clients. Deutsche has given Mazda a target price of 180 yen, which would be its highest level since late October. It closed today at 155 yen.

Like other Japanese automakers, Mazda will also benefit from the speed with which it moved to cut production—and reduce mounting inventories—in January and February. In January, its domestic production slumped 66.2% from a year earlier to 31,130 units, while exports, at 20,207, were down 72.1%. In both cases, that’s faster than sales fell. Over the weekend, reports in the Japanese media speculated that Mazda will increase Japan production by about 10,000 vehicles a month from current levels by July. According to the Nikkei, Mazda will restart production on Fridays two times a month from April and return to regular working hours at its Japan plants in the summer.

Of course, with the global economy showing few signs of bottoming out, it’s tough to be optimistic. One big problem faced by Mazda, which has the second lowest credit rating among Japanese carmakers, is the difficulty of raising funds—the company has said it may have to tap government aid to raise finance. And another surge in the yen, which has weakened in recent weeks, would be very hard for Mazda, which has fewer plants outside Japan than rivals, to stomach. Yet with inventory levels seemingly under control and its hottest selling model on the way, a recovery of sorts seems to be underway.

Reader Comments

Ruth

March 16, 2009 11:30 PM

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Ruth

name

March 23, 2009 8:31 PM

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I am still awaiting a satisfactory answer from an authorized representative ?


Dear Sir / Madam.

Reference: John Newell Mazda Dealership, NSW, Australia.
Please note ATTACHMENT: Authorized Mazda Service Tax Invoice.

SITUATION ONE (1):

Engine mount was rubbing on body metal frame causing shuddering of vehicle at idle.

When serviced, it became apparent one only insulator engine mount required replacement.

As this situation occurred before 50,000 kilometers, the expense should have been accepted by the Mazda Dealership but was not.

SITUATION TWO (2):

Situation one (1) above was presumably under the six (6) year warranty plan i.e. if continuously serviced by an authorized Mazda dealership I was originally informed, warranty extends from three (3) years to six (6) years.

Again the Mazda Dealership did not accept responsibility as it was explained in the contract the extra three (3) year warranty is only with the Mazda Dealership where the vehicle was purchased from.

Said vehicle was purchased and serviced at different authorized Mazda dealerships.

SUMMARY:

Obviously it seems there are different standards for various authorized Mazda Dealerships as they do not have the same warranty plans. I find this rather prejudiced and customer inhibiting, Mazda I thought was one (1) company.

As I mentioned above the insulated engine mount is obviously a part and/or install defect, thus should be the responsibility of Mazda not the loyal customer.

CONCLUSION:

I am not after reimbursement as I am considerate of procedures already instigated but I think a fair answer would be the next service is free of charge.

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