Mazda Motor Corporation reported that lower‐than‐expected tariff relief in its key U.S. market has squeezed H1 operating margins by approximately 120 basis points. The company absorbed an additional $150 million in import duties as tariff reductions scheduled for April were pushed back to July. European volume constraints also weighed on performance, with deliveries falling 8% year-over-year in the region due to dealer inventory limits and production allocations focused on new model launches.

Foreign exchange movements further dampened H1 results, with the yen appreciating nearly 5% against the dollar through March, eroding ¥12 billion of operating profit. Mazda countered by raising U.S. retail prices by an average of 3.5% in May, a move that has thus far sustained year-to-date U.S. unit sales growth of 4%. Later in the quarter, targeted forex hedges and a 2% yen depreciation helped claw back roughly ¥4 billion in translation losses, partially offsetting tariff and currency headwinds.

Management expects a notable improvement in H2 as full tariff reversals take effect in August, eliminating the $75 million quarterly duty burden. In Europe, ramp-up of the new CX-90 and refreshed MX-5 models is projected to drive 12% volume growth in Q4 compared to the year-ago period. While overall end‐market growth is forecast to remain muted—industry registrations grew just 1% in the latest month—Mazda’s disciplined pricing strategy and inventory push position the company to reclaim lost margin and deliver mid‐single digit operating profit growth in the second half.