Mazda has released its results for the first half of the FY2024, ending March 31, 2024, covering the period from April 1 to September 30, 2023. Global sales of Mazda vehicles grew 20 percent to hit 616,000 units.

Despite the threat of high inflation and high energy prices, Mazda recorded its best-ever first-half year profit. Net sales were up 41 percent to 2.317 trillion Yen, while operating income was up 135 percent, to 129.6 billion Yen.

Continued supply chain disruptions, including a typhoon incident, caused Mazda to miss its H1 sales target of 650,000 units. However, the high earning power of its upscale SUVs enabled the company to reach record highs in per-unit revenue.

Mazda attributed the strong performance to its latest range of upscale Large Product platform SUVs, which feature longitudinal engines, including a 6-cylinder turbo diesel, with rear- or all-wheel drive. The American market-focused Mazda CX-90 and European / Asian market Mazda CX-60 were instrumental in pulling Mazda out of the rut in EV-centric China.

CEO Masahiro Moro said a further ramping up of the Mazda CX-50’s production at the company’s Alabama plant in USA will boost sales further in its most important North American market. The USA and Canada contribute 40 percent of the company’s total sales.

“Accordingly, we will revise our full-year outlook upward and take on the challenge of achieving net sales of 4.8 trillion yen, operating income of 250 billion yen, and net income attributable to owners of the parent of 170 billion yen, all of which are record highs for Mazda,” said Moro.

However, Mazda acknowledged that its loss of market share in China and Thailand is due to the rising popularity of EVs. Sales dropped 8 percent in China. The situation is more severe in Southeast Asia, where Mazda’s sales dropped 17 percent, dragged down by poor performance in Thailand – Mazda’s most important market in the region.

“In China, New Energy Vehicle sales were strong and internal combustion engine models struggled due to increasing price competition. As a result, our sales in China declined from the prior year, particularly in the first quarter, down 17%. In the second quarter, we revised pricing and content of some models to reinforce sales, protecting our network for future introductions of plug-in hybrid models and battery EVs. As a result, sales in the quarter were higher than a year ago. We’ll continue to act nimbly in the market in line with our mid-term strategy.

“In ASEAN, mainly in Thailand, sales volume was below our plan and declined from the prior year. In the Thai market, like China, momentum of electric vehicles was strong, which put pressure on sales of combustion models. Performance in other ASEAN markets was about on track to our sales target.”

Mazda is cutting its sales forecast for FY2024 by 14,000 units, to 1,286,000 units, but stressed that the figure is still 16 percent higher than what it did in FY2023. The reason is due to intense competition in China and Thailand.

The latest financial results also suggest that BYD is pulling customers away from Tier-2 brands like Nissan, Mazda, and Suzuki, rather than Tier-1 brands like Toyota or Honda. Last week, Toyota announced a record breaking H1 FY2024. Toyota’s H1 FY2024 sales in the Asian region, despite a slowdown in China, grew 16.2 percent.