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Management’s Discussion and Analysis
FISCAL 2006 HIGHLIGHTS
●Operating income rose 28.4%, to ¥158.5 billion, and net income expanded 10.5%, to ¥73.7
billion. All income categories reached new historic highs, and sales and income expanded for
the sixth consecutive year.
●The net debt-to-equity ratio improved 13 percentage points, to 49%.
●Dividend per share increased ¥1.0 from the fiscal 2005 level, to ¥6.0.
OVERVIEW OF THE MAZDA GROUP
The consolidated financial statements for fiscal 2006, ended March 31, 2007, include the
accounts of Mazda Motor Corporation, 58 consolidated subsidiaries (22 overseas and 36 in
Japan) and 13 equity-method affiliates (five overseas and eight in Japan).
BUSINESS CONDITIONS
During fiscal 2006, the Japanese economy progressed along a gradual growth trajectory, but
consumer spending lacked vigor, and a decline in the number of registered vehicles caused
concern in the automotive industry. In addition, home mortgage issues generated uncertainty in
the United States economy.
Geopolitical risks, exacerbated by political instability in Asia and the Middle East, and
hypersensitivity in the financial markets contributed to making fiscal 2006 a year of cataclysmic
changes for the global economy. Furthermore, crude oil and other raw material prices remained
high, compounding an overall sense of economic precariousness.
In the automobile manufacturing industry, Japanese demand for mini vehicles increased,
contrasting with a major slump in demand for registered vehicles, causing overall demand to fall
4% during the year, to 5.62 million units. Total U.S. demand declined 3%, to 16.51 million units,
whereas demand in Europe, including Russia, edged up 2%, to 18.77 million units. Demand in
China, meanwhile, surged 29%, to 4.53 million units (passenger vehicles only).
CONSOLIDATED FINANCIAL RESULTS
Net sales
During the year under review, Japanese demand for registered vehicles fell to its lowest level
since 1977. As a result, Mazda retail sales in the Japanese market declined 8.6% year on year,
to 261,000 units. In North America, Mazda retail sales expanded 8.0%, to 380,000 units, with
Operating Income Net Debt-to-Equity Ratio
(%)
(Billions of Yen)
20062005200420032002
20062005200420032002
0
40
80
120
160
0
40
80
120
160
200