Fluctuating currencies cost Mazda one billion US dollars in 2 years

greenspun.com : LUSENET : Grassroots Information Coordination Center (GICC) : One Thread

Wednesday, October 18 10:30 AM SGT

Fluctuating currencies cost Mazda one billion US dollars in 2 years HIROSHIMA, Japan, Oct 18 (AFP) - Foreign currency fluctuations, and notably the fall of the euro, cost Japanese car manufacturer Mazda one billion dollars in the last two years, the company's financial director has said.

"Taking into account the US dollar, the Euro and the Australian dollar, exchange rate risks costed us one billion dollars over the last 2 years, with a larger impact on euro," Robert Shanks told journalists visiting the company's production headquarters near the southern city of Hiroshima Tuesday.

Shanks, unwilling to formulate profits for the period ending March 2001, recognized that the exchange rates which Mazda used for forecasting were too optimistic.

The downfall of the euro hit Mazda hard as one quarter of its world sales are generated in Europe, particularly Germany.

"Another concern is the Australian dollar. We assumed that it would have been much higher than was the case, but the volumes involved are much lower," he said.

Shanks and Mazda boss Mark Fields have admitted that a strategic question Japan's fifth largest manufacturer must face is whether to add a European production base to its capacities.

In spite of its dependence on this market, the group is the only Japanese manufacturer without a factory in Europe and the national press has in recent month been rife with rumours of a transfer of assembly lines to Ford plants in Europe.

"We have already said it, we are examining this issue and a decision will be made by the end of this year," Field said.

"It is a very complicated decision that involves another partner, Ford, product development, supply base and our capacity in Japan.

"The lack of a production base in Europe is obviously an issue for us, we are the only Japanese maker in this situation," Shanks said.

Mazda will announce its results for the first quarter on November 17 and will benefit by reviewing its yearly forecastings.

"For the first half, exchange rates were not an issue, our base rates were extremely close to reality but we missed the sales forecasts in all our markets.

"In Japan and the US, we were impacted by a very strong competitive activity," said Shanks, without giving any detail.

Mazda hopes to redress the balance with its new Tribute model, which went into production on Tuesday in Japan, three months after parts were sent from Ford's US assembly plant. The 4X4 will make its Japanese debut on October 30.

http://asia.dailynews.yahoo.com/headlines/business/article.html?s=asia/headlines/001018/business/afp/Fluctuating_currencies_cost_Mazda_one_billion_US_dollars_in_2_years.html

-- Carl Jenkins (Somewherepress@aol.com), October 18, 2000


Moderation questions? read the FAQ