TOKYO - Mazda Motor Corp., and Mitsubishi
Motors Corp., lowered their profit forecasts on Thursday to
bring them in line with the brutal environment of a stronger
yen, sinking demand and tightening credit plaguing the industry.
A deepening global financial crisis is
promising to exacerbate what had already started off as a
difficult year, and executives said its effect could be
long-lasting.
Despite having raised its earnings estimates
for the April-September first half last week, Mitsubishi Motors
said it would miss its original operating profit forecast by 17
percent as sales fall in the United States and Western Europe
and growth narrows in the crucial Russian market.
Mazda, which had been expected to overshoot
its projections, surprised by lowering its operating profit
target by 22 percent to 90 billion yen ($913.5 million) for the
year to March 31. That is far lower than a consensus forecast of
126 billion yen in a recent survey of 14 brokerages. Mazda said
it now expects to sell 1.405 million vehicles this year, or
75,000 fewer than had been planned.
"The halving of its operating profit forecast
for the second half (to 30 billion yen) underscores just how bad
Mazda expects conditions in Europe and its other key offshore
markets will be," said Credit Suisse auto analyst Koji Endo,
characterising the results as "awful".
Mazda and Mitsubishi joined Honda Motor Co.,
in predicting bigger falls in profits this year.
Tokyo-based Mitsubishi Motors now expects
operating profit of 50 billion yen this business year, less than
half the 108.6 billion yen it made in 2007/08 and down from its
initial projection of 60 billion yen. It kept its net profit
forecast unchanged at 20 billion yen.
It lowered its global vehicle sales forecast
by 6 percent to 1.228 million units.
"I see the current situation as an historic
financial crisis," Mitsubishi Motors president Osamu Masuko told
a news conference.
He said making forecasts for the year ahead was extremely
difficult, but he was bracing for much slower growth in Russia,
Ukraine and other rapidly motorising markets that were the
pillar of its growth strategy. - Reuters
