Mazda to cut costs to counter yen's rise: report

Mazda Motor Corp (7261.T) is taking emergency cost cutting steps to soften the impact of the rising yen on its fiscal 2010 profit target, the Nikkei business daily reported.

The automaker, which expects a 30-40 billion yen boost from these steps, will ask suppliers to cut costs by 3-5 percent, the Nikkei said.

The company plans to adopt a common structure for making differently sized cars to help reduce the number of processes required for design, development and crash testing, the daily said.

The new method will be used with its mainline Axela and Atenza passenger cars, known overseas as Mazda3 and Mazda6, the Nikkei said. The next iterations in these series are expected to require 30 percent fewer processes to develop.

Mazda also aims to boost profitability in sales operations. The company's global sales are expected to exceed 1.3 million vehicles this fiscal year, beating its previous target, helped by robust demand in Thailand and China, the Nikkei said.

The Japanese currency is 6 yen stronger to the dollar, and 17 yen to the euro, than Mazda's assumed levels, the daily added.

Each 1 yen rise against the dollar and the euro erodes Mazda's operating profit by 3 billion yen and 1.2 billion yen, respectively, Nikkei said.