Mazda aims to gain ground in the US with new crossover, higher ad spending

Article by Christian Andrei, on February 28, 2012

Mazda is moving forward with a new crossover in the United States this year, even with the financial crisis it experienced in Japan. In addition, the automaker is increasing its advertisement expenses by 25% for 2012. Last week, Mazda Motor Corp. in Japan announced its plans to put $2 billion in new stock up for sale.

It also plans to borrow $878 million from banks to prepare for its largest net loss in 11 years. Moreover, it is seeking an alliance partner. Mazda is greatly affected by the surging yen due to its high rate of exports. The automaker anticipates its fourth straight year of losing money with a full fiscal-year net loss of 100 billion yen or around $1.29 billion, which is worse than previously forecasted. The fiscal year ends March 31.

However, the automaker revealed that it has "bottomed out" and expects a net income in its fiscal fourth quarter and for its fiscal year starting April 1, notwithstanding the strong yen.

Analyst Tatsuo Yoshida at UBS Securities Japan concurs with the assessment. He also anticipates net income in Mazda's fiscal fourth quarter as well as in its upcoming fiscal year. Executives at Mazda in North America refused to make a comment until after the parent company's fund-raising drive, which will probably be in March.

San Jose, Calif.-based Mazda dealer Shaun Del Grande related that he has not noticed changes in the plans of Mazda this year. He related that it is not like when "GM was going bankrupt -- nobody's feeling any of this." Del Grande also owns a Chevrolet dealership.

Mazda executives here have guaranteed to increase advertising spending by 25% this year in order to support the debut of the CX-5 compact crossover. This vehicle is the automaker's first unit to have all the company's Skyactiv technologies like the lightweight frames and chassis, and the more powerful and more efficient powertrains. The CX-5 has started to arrive in showrooms.

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