Japan's Mazda Motor Corp. said Friday it expected to return to profit in the year to March and would build assembly and engine facilities in Mexico that will eventually employ 3,000 people.

Mazda, ranked fifth among Japanese carmakers in terms of volume, expects to score a group net profit of one billion yen ($12 million) in the business year to March 2012.

In the previous year Mazda incurred a net loss of 60.04 billion yen as the impact of the March 11 earthquake and tsunami ravaged production at the end of the fourth quarter.

The automaker expects operating profit in the current year to decline to 20 billion yen from 23.84 billion yen and sales to fall to 2.19 trillion yen from 2.33 trillion yen.

Mazda delayed its forecast as it assessed the impact of the earthquake and tsunami that crippled supply chains and led to power shortages that stymied production.

The automaker also said it had signed formal agreements and begun preparations to establish a Mazda vehicle production facility in Mexico and a sales company in Brazil in alliance with Japanese trading house Sumitomo Corp.

The Mexico production facility will be established as a compact vehicle manufacturing hub mainly for Central and South America, and will include both vehicle and engine assembly plants, it said.

The factories will be constructed in Salamanca, 250 kilometres (155 miles) northwest of Mexico City, with operations starting in the year to March 2014.

The facility will have an annual capacity of 140,000 units, producing Mazda2 and Mazda3 models. It will employ 3,000 people when it operates at full strength.

The Brazilian sales company will begin operations in the year to March 2013.

Mazda this month said it would move car production from Michigan to its domestic plant, leaving the company with no manufacturing base in North America.

The company is expected to cover its sales in the US market with imports from Japan and shipments from the new plant in Mexico.

earlier related report

Japan quake impact stronger than expected: IMF
Sao Paulo (AFP) June 17, 2011 –

The impact from Japan's March earthquake was stronger than expected and has led the IMF to revise its economic outlook to predict negative growth there this year, the Fund said Friday.

"The disruptions from the earthquake have been stronger than anticipated," research director Olivier Blanchard said in Sao Paulo as he presented the group's latest report on the world economic outlook.

He added, however, that "we expect these problems to go away during the year" and said Japan's economy would likely rebound in 2012.

The International Monetary Fund report said the March 11 earthquake, which triggered a tsunami and a near-meltdown at a Japanese nuclear energy plant, was one of the key "negative surprises" for the global forecast.

It noted that industry was affected by disrupted supply chains and that consumer sentiment in Japan took a dive.

It forecast Japan to post growth of -0.7 percent this year, a sharp decline from the 4.0 percent registered last year. But it forecast that growth would bounce back to 2.9 percent in 2012.