* Says to build new factory in Mexico with Sumitomo Corp
* The two will also set up sales company in Brazil
(Updates with profit forecasts)
TOKYO, June 17 Mazda Motor Corp
forecast on Friday a 16 percent fall in operating profit this
year as it takes a hit from a stronger yen and supply chain
disruptions after the March 11 earthquake.
The operating profit forecast of 20 billion yen ($248
million) for the year to March 31, 2012 was better than the
average 5.66 billion yen projection in a survey of 21 analysts
by Thomson Reuters I/B/E/S.
Mazda forecast a net profit of 1 billion yen, swinging from
a 60 billion yen loss last year.
To seek growth in emerging markets, the Japanese automaker
also announced on Friday plans to build a new factory in Mexico,
confirming a Reuters report a day earlier.
Mazda said it would build a $500 million factory in the
central Mexican state of Guanajuato with trading company
Sumitomo Corp , beginning production in the business
year starting in April 2013 and mainly to serve Central and
Mazda will build the Mazda2 subcompact and Mazda3 compact
cars, as well as engines, at the new site. The factory will have
an output capacity of 140,000 vehicles a year and employ about
3,000 at maximum capacity, it said.
Mazda will own 70 percent of the joint venture plant, while
Sumitomo will hold 30 percent.
The partners will also set up a sales company in the
fast-growing Brazilian market, beginning operations in the
business year starting in April 2012, initially selling cars
made in Japan and eventually adding vehicles built at the new
"These initiatives are part of Mazda's plans to achieve its
mid- to long-term goals for emerging markets," Mazda CEO Takashi
Mazda desperately needs to reduce its exposure to the strong
yen, which makes exports more expensive and reduces the value of
earnings made overseas when expatriated. Last business year, it
made more than two-thirds of its vehicles in Japan and shipped
more than 80 percent for exports.
The factory in Mexico will be Mazda's fourth overseas plant
after the United States, China and Thailand -- all held jointly
with former top shareholder Ford Motor Co .
Shares in Mazda ended up 1.6 percent at 195 yen before the
results, outperforming a rise in the benchmark Nikkei
($1 = 80.615 Japanese Yen)
(Reporting by Chang-Ran Kim; Editing by Joseph Radford)