"TOKYO -- Japan's fifth-largest auto maker, Mazda Motor Co., said a continued dollar exchange rate of ¥115 would be bad for earnings but that it wasn't backing off its full-year profit estimates.

"There will be adverse profit implications," President Lewis Booth told reporters after speaking at an industry conference Tuesday.

He said the company had hedged to some extent for the second half of the business year but not enough to offset a continued rate of ¥115 to the dollar.

Like many Japanese auto makers, Mazda had assumed an average rate of ¥125 to the dollar for the business year, which began April 1.

Also speaking at the conference, Nissan Motor Co.'s vice president in charge of investor relations, Dominique Thormann, said Nissan still expected to meet its forecast of a third straight year of record profit.

Mazda's Mr. Booth said the challenge was to offset the negative impact from the exchange rate. He said there were some measures the company could take in the short term but didn't elaborate.

In the long term, steps such as production of its subcompact Demio in Europe would reduce Mazda's vulnerability to a strong yen, he added.

Mazda, one-third owned by Ford Motor Co., has predicted a consolidated net profit of ¥20 billion ($172.6 million) in 2002-03 on the back of three new models after none in the last business year.

Nissan, Japan's third-largest auto maker and 44.4% owned by France's Renault SA, expects to post a group net profit of ¥380 billion in the current business year.

Auto analysts have said they don't expect the yen's strengthening to have a significant negative effect on Japanese auto makers' ability to meet their profit targets in 2002-03.

Most firms hedge currency risks three months in advance and made substantial gains when the yen was trading at 130 to the dollar earlier this year, they say.

But the yen's recent strength against the dollar has weighed on the stock prices of auto makers, as investors have given up on hopes of the same windfall gains from a weak yen that the car companies experienced in the last business year.

Shares in Mazda fell 1.2% to ¥333 Tuesday, while Nissan fell 1.5% to ¥805."

Just thought I would share. In today's WSJ.

 

Nissan is obviously in the blue. I want to see those earnings trickle down to even better R&D and renewed branding focus at the dealership level!

 

It doesn't sound like Nissan will be hurt too badly, so a boost in MSRP may not be in the picture. After all, they have trumpeted the base price on each model all over the country for several months; hope I am right.

Thanks for the article, BullishZ; until we get our cars its a good idea to keep an eye on the yen so we won't be surprised.

Boomer
BR/FR/AT

 

You know, I just read the Businessweek article regarding Nissan and the 350z... Ghosn's career is kinda depending on the success of the Z. Seems he's a Z buff himself. He also really got involved in the refining of the Z. The first pre-production model had only 1 exhaust pipe. Ghosn himself ordered that the designers go back to the drawing boards, because a "real sports car" has 2 exhaust pipes, on each side of the car.

I'm so glad to have the top exec on top of things regarding my future car.