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Mazda's first-quarter profit slumps on weak sales in U.S. and China

TOKYO — Mazda reported a 79% drop in quarterly operating profit, falling significantly short of estimates, as it continues to struggle with declining U.S. and Chinese sales, while a strengthening yen also cut into its bottom line. Operating profit at JapanÂ’s No.5 automaker was 7.0 billion yen ($64 million) in the first quarter ended June, versus around 33 billion yen a year ago and less than half of an average forecast for 18.5 billion yen from analysts polled by Refinitiv. Mazda, however, reiterated its forecast for a 33% rise in operating profit to 110 billion yen in the year ending March. ThursdayÂ’s profit announcement marks MazdaÂ’s poorest first-quarter operating performance since the June 2012 quarter. The automaker has been struggling with falling demand for its cars over the past year or so, while it is also recovering from flood-related damage to its factories in Japan that led to a quarterly loss in the July quarter of 2018. The Nikkei business daily on Wednesday had reported that operating profit at the company would fall around 70% for the quarter due to lower sales in the United States. Mazda posted global sales of 353,000 units for the quarter, down 12% from a year ago. Its sales in the United States, its biggest market, fell 15% to 68,000 units, while in China, Mazda sold 54,000 vehicles, down 21% on the year. A trade war between the top two economies and slowing growth in China, the worldÂ’s biggest auto market, have prompted a broad-based sales downturn in the global auto sector. Automakers are grappling with easing demand for cars just as they must invest heavily in new technologies including electric cars, autonomous driving technologies and ride-sharing services to survive a major industry shift away from car ownership. Many of MazdaÂ’s rivals at home and abroad have been reporting disappointing quarterly results, with Nissan and Ford also announcing job cuts and possible plant closures earlier this month. The United States is a key source of revenue for Mazda, but it imports all its vehicles sold there, exposing it to a threatened hike in U.S. tariffs on imported cars from Japan. To limit its vulnerability to possible tariffs and currency fluctuations, Mazda is investing in a new plant in the U.S. state of Alabama, a joint project with Toyota.

Mazda's mission for the 2017 CX-5: Smooth out the NVH

NVH: the dreaded noise, vibration, and harshness. According to current Mazda CX-5 owners, as well as those who decided against becoming owners, NVH was its biggest area of need. Traveling in the CX-5 was just too loud, so Mazda's engineers made sure that the redesigned, second-generation model would offer its occupants a more serene environment in keeping with quieter competitors. To reduce wind noise, more aerodynamic parts were strategically placed about the exterior, while extra efforts were made to reduce low-frequency noises on coarse surfaces. According to Mazda engineer Dave Coleman, the new CX-5 is nearly as quiet as its platform-mate, the 2016 CX-9. Actually, to be very accurate, all Mazdas apart from the CX-3 and 2 (aka Toyota iA) now share that platform. Another reason compact SUV buyers opted to skip the CX-5 was its comparatively firm ride. So, while the CX-5 remains "head and shoulders above the segment for handling," according to Coleman, the ride was improved. One of the primary ways of achieving that was the adoption of rigid steering mounts, which allowed for the suspension to be less stiff without a loss in handling precision. View 12 Photos Of course, handling remains a key reason to buy the CX-5, and it's improved for 2017 courtesy of an increase in body rigidity, the adoption of liquid-filled front suspension bushings, and Mazda's G-Vectoring Control. Under the hood, every CX-5 now comes standard with the 2.5-liter Skyactiv-G four-cylinder, with output figures to be announced at a later date. The 2.0-liter, previously standard on the Sport trim, has been exiled to other markets. However, finally making its appearance on these shores is Mazda's 2.2-liter Skyactiv-D diesel engine. Although Mazda did its darndest to make it certifiable in the United States without a urea injection system, it was ultimately unable to do so without resorting to an ultra-sluggish throttle response that engineers deemed was anathema to what was expected of a Mazda. Therefore, the diesel-powered CX-5 will indeed have a DEF tank that will need to be periodically topped off to not run afoul of emissions regulations. Otherwise, the 2017 CX-5 is very much an evolution of the SUV it replaces. Customers thought its size was just right, so its passenger and cargo area remain in the same ballpark.

Mazda to relocate its US offices into Irvine's tallest building

Mazda is the latest foreign automaker to be moving its North American headquarters. Only this time, it's not moving further south. Instead, the Japanese automaker is simply relocating to another facility in Irvine, CA. In a little over a year from now, Mazda North American Operations will move to 200 Spectrum Center Drive (pictured in the rendering at right), taking up five of the 21 floors in Orange County's tallest building for a total of over 100,000 square feet of office space. It'll also take up half the lobby with vehicles on display and the exclusive naming rights on the top of the building. The facility, designed by Pei Cobb Freed & Partners, boasts full glass walls from floor to ten-foot ceiling for uninterrupted 360-degree views. Mazda has been in its current US headquarters at 7755 Irvine Center Drive (pictured above) since 1987. The five-story building was specifically constructed for the purpose and was the tallest in Irvine at the time. Prior to that it was based in Compton from 1970. The move to the new facility is scheduled to take place in February, 2017. Mazda's announcement marks only the most recent of foreign automakers to relocate their North American headquarters. Toyota is moving to Texas, Subaru to Camden, Lotus to Ann Arbor, Daimler to Farmington Hills, and Mercedes-Benz to Atlanta (where Porsche recently relocated, as well). Cadillac also recently moved from GM's Renaissance Center in downtown Detroit to its new headquarters in New York. Hyundai and Kia also quarter their North American operations in Irvine, as does Aston Martin. Meanwhile Honda and Toyota (for the time being) are based less than an hour away in Torrance, and Mitsubishi halfway in between in Cypress. Though they no longer sell passenger cars in North America, Isuzu and Suzuki still operate their US bases in SoCal as well, in Anaheim and Brea, respectively – all municipalities located just south of Los Angeles. Nissan and Subaru also base their US operations outside of California, with head offices in Tennessee and New Jersey, respectively. Related Video: Mazda Set To Relocate North American Headquarters in 2017 - With 50 years of roots in Southern Calif., Irvine will remain 'home' for Mazda - IRVINE, Calif., Jan. 11, 2016 /PRNewswire/ -- Mazda North American Operations (MNAO) has spent the last three years bringing all-new, upscale vehicles to the U.S. and earning outstanding critical acclaim in the process.