labels: Cars, World economy
Mazda Motor Corp to resume full production at its plants news
21 May 2009

Like other Japanese automakers Mazda Motor Corp, which had cut production in the wake of the global economic crisis, says it now plans to resume full production at its plants in Japan in next month in view of demand picking up in Europe.

Mazda, Japan's fifth-largest automaker had closed its Hiroshima and Hofu plants.  It started normal production at its Hofu plant in April itself and at Hiroshima plant, which was suspended for two days in the month was later reduced to a day. The company said that from June production will resume to normal.

The European governments to encourage people to buy more ecological vehicles have come out with tax incentives in the form of tax cuts or rebates, which is improving auto demand. This may gradually translate to renewing demand in other markets as well as in Japan under various government economic stimulus packages.

For instance in Germany the government helps consumers to scrap their nine-year old car for a new one by paying the consumer 2,500 euros($3,400). This has resulted in demand improving in German, France and UK.

Last week, Mazda posted a net loss of nearly $728 million for year ended 31 March. It also warned that this year too would not be good.

Mazda has seen its sales collapse in the face of a global economic meltdown which resulted in its short-term borrowing rising steeply last fiscal year. The company may have no option but to turn to the government for low interest loans as its credit rating has taken a beating preventing it from tapping the capital market.

Secondly, another major set back for the company has been its partner, Ford Motor Co., selling its 6.9 per cent controlling stake in the company, adding to it debt. This will also force Mazda to do its own development in the future.

In a move to pull itself back the company made two announcements last week. Mazda has updated the Mazda Titan, a medium-duty truck for the Japanese market. The updated Mazda Titan lineup offers improved environmental and fuel economy performance. The freshened models went on sale nationwide last week.

The company began booking orders for the all-new Mazda Axela (known overseas as the new Mazda3) last week throughout Japan. The sales launch is set for June 11, 2009. The suggested retail prices (including tax) is likely to be in the range starting from 1,660,000 to 2,678,000 yen.

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Mazda Motor Corp to resume full production at its plants