Mazda Might Reduce Its Midterm Sales Target for China image

Mazda announced it might lower its midterm sales target for China, after sales dropped for 17 consecutive months in this market.

Mazda, which is the most export-dependent automaker in Japan, previously planned to sell 400,000 vehicles in China by 2016. Now this target might be lowered, according to Masamichi Kogai, who has been named the automaker’s president in June. Mazda expects sales in China to reach 200,000 units this fiscal year.

No Japanese automaker has recorded a big turnaround regarding the share price or profits since the yen started to weaken, but Mazda still has to emerge from the slump in the Chinese market. Earlier this year the automaker has reshuffled its top management in China hoping spur recovery, also relying on the locally manufactured Mazda 6 and CX-5 SUV.

“Mazda is switching to local production of their top models in China now, so once that kicks in, sales should pick up,” said Koichi Sugimoto, an auto analyst at BNP Paribas in Tokyo. “Their products are improving, and the models they’ll be introducing fall under the popular category in China too.”

During the first eight months of this year Mazda’s sales in China have dropped 21%, being among the worst performing automakers. But Mazda is not the only Japanese automaker struggling in China. Toyota, Honda and other Japanese car makers still have to recover since the anti-Japan protests which affected sales and production there a year ago.

In other markets Mazda continues to increase, including the US where deliveries jumped 26% last month, thanks to rising demand for the new CX-5 and the Mazda 6. Since the beginning of the year sales jumped 6.8%.

Source: Bloomberg