Mazda 2012 Annual Report Download - page 14

w will launch a new Mazda6 as a second round to
follow the new CX-5. If we are able to achieve our sales plans
for these new models with outstanding product strength and
cost competitiveness, Mazda’s profit margin will improve as a
result, and I believe we will be fully able to achieve our target
of ¥30 billion in operating income.
Q The strong yen continues to be a concern. How
do you plan to address this going forward?
A One of the issues we are dealing with is the mismatch
between markets for sales and production centers. To address
this, our Structural Reform Plan aims to bring the percentage
of overseas production to 50%, and to achieve this, we plan to
build a plant in Mexico, move to local production in Russia,
raise our production capacity in China, and increase production
in the ASEAN region. Nevertheless, reaching this target will
require some time. Therefore, over the near term we intend to
bolster our resistance to exchange rate fluctuations and
minimize their impact on earnings by further improving our
cost structure, and through optimal procurement on a global
level and increased foreign currency-denominated fund
procurement.
Q Mazda recently announced an agreement with
Italy’s Fiat to jointly develop and produce a two-
seat sports car. What is Mazda’s fundamental
policy regarding alliances with other companies?
A We do not intend to conclude a comprehensive tie-up with
any particular company. Nevertheless, we do consider it
very important to determine whether we can build win-win
relationships based on certain products or geographic regions.
For example, Mazda has an excellent product with the MX-5
(Japanese name: Mazda Roadster), which holds a Guinness
record for sales. Going forward, however, it would be difficult
to independently develop a new model in this segment because
the market is contracting, but we believe efficient devel-
opment and production will be possible through Co-operation
Program with Fiat.
Q What measures are you implementing to
strengthen Mazda’s financial base?
A In March 2012, we procured funds through a public offering
and a subordinated loan. These funds will be used to achieve
further rapid progress in establishing a global production
structure and in expanding SKYACTIV products. I also consider
the subordinated loan to be important for the message it
sends internally and externally, showing that even though
Mazda is facing a variety of issues, the measures we are taking
are supported by our main financial institutions. This
procurement led to a significant increase in our equity ratio, to
24% from 19% at the end of the December 2011, and taking into
account the equity capital nature of the subordinated loan
brings the ratio to 26%.
This also brought the net debt-to-equity ratio to 64%, from
155% at the previous fiscal year-end, and including the subor-
dinated loan further lowers the ratio to 53%, well below the
100% level and significantly improving our financial position. I
still do not consider this sufficient, however. Our basic policy is
to increase equity capital by generating solid cash flow and
building up profit. I would like to see the equity ratio brought
to the 30% range as quickly as possible.
The SKYACTIV technology that we have been focusing on is
finally beginning to show its effectiveness. Orders for the new
CX-5 are more than double the original plan, and this has made
us even more convinced of the strength of SKYACTIV tech-
nology. As a second round, we will launch a new Mazda6 during
the second half of the fiscal year March 2013. I am confident
that the new Mazda6 will follow the path of the new CX-5 and
be very well received around the world.
Mazda is building a global earnings base using product
strength that is second to none, excellent design, and unri-
valed driving performance and fuel economy. Even if there
continues to be a pronounced effect from the strong yen, I am
determined to carry this out. We have decided on what needs
to be done and we will steadily carry out these measures and
strive to meet the expectations of our shareholders and other
stakeholders. I ask for your continued support.
Mazda Annual Report 2012
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