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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.

IIHS Top Safety Pick and Top Safety Pick+ awards get tougher: Here are the latest winners

Automakers love to trumpet the accolades from the Insurance Institute for Highway Safety, but the agency keeps making its best grades harder to achieve. For 2020, it is raising the bar again, requiring a better score in the passenger-side small-overlap crash test, wider availability of top-performing headlights, and automatic emergency braking systems that effectively avoid collisions with pedestrians, in addition to its previous benchmarks. Why the 2020 criteria is harder: To be named either a Top Safety Pick or Top Safety Pick+, the required performance in the passenger-side small-overlap crash test has been raised from Acceptable to Good, meaning that the model must achieve Good ratings in all crash tests. The Nissan Rogue, for example, scored an Acceptable in the passenger-side small overlap crash, and so it loses its Top Safety Pick rating for 2020. To achieve either of the top ratings, a vehicle's automatic emergency braking system must effectively avoid hitting pedestrians as well as other vehicles. (The automatic emergency braking system can be optional, but then the award applies to the model only when so equipped.) Any vehicle whose automatic emergency braking system does not include pedestrian detection would lose its TSP or TSP+ rating for 2020, the Ram 1500 being one example. To be named a Top Safety Pick+, the model can have no variant with headlights that achieve less than an Acceptable rating (most new cars have different headlights — often LEDs — that are exclusive to upper trim levels).

Mazda ranks first for reliability in Consumer Reports, dethroning Toyota, Lexus

For time immemorial, or at least the past six years, Toyota and Lexus have sat at the top of Consumer Reports' annual survey of vehicle reliability. It was almost as much a given as blue skies and taxes. Not any more. Mazda has dethroned them both, ascending to the No. 1 spot for the first time. Mazda nabbed the top spot with powertrains and that used durable (and more fun) six-speed automatic transmissions instead of CVTs, which tend to be more fragile. Mazda also didn't rely on overly fancy infotainment systems, instead bucking industry trends with cockpits that discourage screen use during driving and encourage buttons and dials that can be handled without taking your eyes off the road. The most reliable Mazda was the MX-5 with a score of 98 out of 100, followed by the CX-30, CX-3, and CX-5, all scoring 85 or better. Overall, Toyota and Lexus still rank far above the average, taking the second and third spots respectively. Lexus was dragged down by problems pertaining to the LS, but CR didn't specify the nature of those issues. Buick was the most improved brand, jumping up 14 spots to claim fourth. Its show was attributed largely to the Encore, which received a score of 91. Honda moved up seven positions to round out the top five, but was denied a better position due to the Passport and Odyssey's scores in the mid-30s. Among European brands, Porsche ranked highest, at No. 9. BMW moved up five spots to 12th, while Audi kept its mid-pack position at 14th, and Mercedes brought up the rear among the German big three in 20th place. At the bottom of the list were Ford, Mini, Volkswagen, Tesla, and Lincoln falling 11 places to dead last. In particular, the Ford Explorer was called out for having the fewest points of any model, barely registering at all a score of 1, thanks to gremlins with engines, body, power equipment, electronics, and transmissions. Tesla's newly introduced Model Y crossover dragged down the electric carmaker's standing to the penultimate spot. Owners of the Model Y, which began production in January, have reported misaligned body panels that had to be fixed and mismatched paint including, in one case, human hair stuck in the paint, according to Consumer Reports. The Model Y finished with a "much worse than average" reliability rating. The rankings are taken annually based on a survey of 300,000 vehicles. Information from AP was used in this report.