Mazda Motor Corp. is facing criticism for having decided to sponsor the All-Star baseball game in July when it’s far from recovery. In fact, it has had its largest annual loss in 11 years and is the only unprofitable Japanese automaker for having insisted on keeping most of its production at home. Mazda is being pressured to dump the Hiroshima Carp baseball team.
It has only been a few weeks after it sold $1.8 billion in new stock to restock its depleted capital. Mazda is the lone Japanese carmaker to manage a team in the league, run a professional soccer club, operate a hospital and own over $5 billion in land.
Mazda’s assets are so diversified that it’s being scrutinized along with the revival plans of President Takashi Yamanouchi. Mazda, which is the Japan-based automaker that relies the most on exports, has suffered under Yamanouchi as its 30-year partnership with Ford Motor Co. fell apart and he kept defying the strengthening yen by making production stay in Japan.
Kazuyuki Terao, chief investment officer at Allianz unit RCM Japan, said that this arrives “at the worst time." Investors’ apprehensions are justified.
All the major automakers in Japan struggled and their shares declined last year as the result of the calamities in Japan and Thailand. However, Mazda's 42% drop was the steepest due to its vulnerability to the yen.
It produces nearly 70% of its cars in Japan, about 80% of which are shipped overseas. This is the industry’s highest ratio. In the year ended March 31, its revenue likely dropped 12% to 2.05 trillion yen ($25 billion). This is certainly worse than Toyota Motor’s 2.3% drop and Honda Motor Co.’s 10% decrease, according to the average of analysts' estimates that Bloomberg compiled.