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February 21, 2011updated 08 Apr 2021 8:18am

JAPAN: Mazda to counter yen with more import parts

Mazda Motor wants to increase use of overseas parts in domestic production to as much as 30% because the yen is too strong to make export dependent output profitable.

Mazda Motor wants to increase use of overseas parts in domestic production to as much as 30% because the yen is too strong to make export dependent output profitable.

Mazda CFO Kiyoshi Ozaki told Reuters he saw little chance the yen would appreciate further against the dollar because the US economy is recovering so the automaker will continue lowering manufacturing costs and review designs to build vehicles more cheaply.

Mazda was the only Japanese car maker to report a net loss for the October-December quarter, hit by plunging domestic demand and the strong yen.

Mazda exports about 80% of the vehicles it builds in Japan, compared with around 50% at Toyota, 30% for Honda and 60% at Nissan, Reuters noted.

Mazda is raising prices of vehicles in some markets, focusing on sales of larger vehicles with bigger profit margins, and lowering sales promotion costs per vehicle, Ozaki said.

The company was able to lower its break-even point by JPY8 against the dollar this fiscal year from the last, Ozaki said, although he declined to specify what the level is.

The propoertion of cheaper overseas-sourced parts would rise from 20% now to 25%-30% in five years, he added.

It also hedges by making dollar forward contracts.

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