A Bump In The Road For Japan's Mazda
It was a major blow. On Dec. 24, Mazda Motor Corp. revealed that a fire at one of its main plants on Dec. 15 would cause production delays affecting some 35,000 vehicles, including top-of-the-line export models such as the RX-8 sports car. It's too early to say what impact the accident will have on earnings. Mazda plans to shift production to other factories. But the fire marks a setback, since the company had expected record profits this year.
Mazda has just begun to reap the gains of restructuring begun after Ford Motor Co. (F ) upped its stake in Japan's No. 4 auto maker to a controlling 33.4% in 1996. In November, Mazda reported a 68% jump in net profit, to $169 million, on a 9% gain in revenue, to $12.6 billion for the fiscal half ending Sept. 30. Ford has been counting on Mazda's earnings to boost the bottom line as it struggles to fend off Japanese rivals Nissan Motor Corp. (NSANY ) and Toyota Motor Corp. (TM ) in the U.S.
Edited by Patricia Kranz