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Mazda anticipates slowdown in US demand by early 2023

Executives from Japan’s Mazda Motor Corp. made statements about the state of the economy and rising interest rates in the United States on Thursday, saying they expect a slowing of vehicle demand early next year.

“As for the US market from next spring onward, we believe that the economy will gradually slow down,” said Yasuhiro Aoyama, senior managing executive officer. “As the tight semiconductor market is still continuing, the supply-demand relationship is not likely to loosen so easily.”

Aoyama said he expects the combination of rising interest rates and inflation would lead consumers to purchase lower-priced models.

Mazda executives said US sales have dropped 30% year-over-year during the first six months of the fiscal year that started in April, mainly because of production cuts caused by Covid-19 lockdowns in Shanghai.

The automaker has lowered its global sales target to about 1.2 million vehicles, a drop of about 10% and 133,000 units fewer than initially forecast. The change was prompted by a carrier vessel shortage and production cuts stemming from the ongoing semiconductor chip shortage.

Despite a lowered sales target, Mazda remains optimistic about its financial situation through the end of the fiscal year, which ends in March 2023. The automaker raised its operating profit outlook by 17% to 140 billion yen ($956.94 million), partly because of the weakening yen.

Mazda senior managing executive officer Masahiro Moro said the company was promoting switching semiconductor types and dual sourcing, measures Moro said had enabled the automaker to procure parts more stably. However, supply shortages in new semiconductor parts mean the chip shortage will likely remain “severe.”

“The situation continues to be that it is difficult to see clearly for the next two weeks,” Moro said.

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