February 6, 2013 / 10:51 AM / in 5 years

Mazda, Fuji Heavy lead Japan carmakers as yen weakens

* Mazda, Subaru raise profit outlook on falling yen

* Mazda shares up more than 150 pct in three months

* Currency moves will not mean strategy changes -Mazda

By Yoko Kubota

TOKYO, Feb 6 (Reuters) - Among Japanese carmakers, Mazda Motor Corp and Fuji Heavy Industries Ltd are best placed to benefit from the weakening yen, raising their earnings forecasts as exported goods bring in more cash.

Mazda makes 71 percent of its vehicles in Japan and exports about 80 percent of them, while Fuji Heavy makes about three-quarters of its cars at home, shipping about 67 percent of those.

Their higher domestic production and export ratios than top three automakers Toyota Motor Corp, Nissan Motor Co Ltd and Honda Motor Co Ltd put them in a strong position to take advantage of a yen that has lost around 20 percent of its value versus the dollar since October.

“The companies (Mazda and Fuji Heavy) have restructured themselves while they were struggling from a strong yen, and their reforms have seen much progress,” said Mitsushige Akino, a fund manager at Ichiyoshi Asset Management.

“Rather than the yen moves, what matters now are their core strategies, such as how it can become more competitive to boost shares.”

Mazda, the fifth biggest Japanese carmaker by sales, raised its operating profit outlook for the year ending in March by 20 billion yen to 45 billion yen ($481.8 million), which would be its highest since the year ended March 2008. The softer yen accounted for an 18.4 billion yen boost.

Fuji Heavy, which makes Subaru cars and is seeing strong sales in its biggest market the United States, lifted its operating profit outlook by 25 billion yen to a record 107 billion yen, with currency moves boosting profit by 23.3 billion yen.

Still, the firms said the currency moves would not change their plans to build more cars in foreign markets where demand is strong, wary of the yen reversing its trend and eating into profits.

“We will absolutely maintain our structural reform, even if the strong yen is being corrected. We do not want to repeat the struggles from recent years,” Mazda Chief Executive Officer Takashi Yamanouchi told reporters. Mazda has booked a net loss for the past four years since the global financial crisis in 2008.

The weaker the yen, the more money Japanese companies make when they convert overseas profits back into their home currency, and products exported from Japan can be sold at more competitive prices abroad. Japanese carmakers with a big domestic production base are more exposed to this move than those who make most of their cars outside Japan.

Mazda stock is the best-performing among Japanese automakers in the past three months, jumping 167 percent, followed by Fuji Heavy Industries’ 73 percent leap, both on expectations the weaker yen would boost their businesses.

Mazda shares ended up 4.4 percent at 283 yen, and Fuji Heavy rose 5.1 percent to 1,371 yen on Wednesday, outperforming a Nikkei index that was up 3.8 percent.

$1 = 93.3950 Japanese yen Editing by Daniel Magnowski

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