Mazda Motor has forecast a 16 per cent fall in operating profit this year as it takes a hit from a stronger yen and supply chain disruptions after the March 11 earthquake.

The operating profit forecast of 20 billion yen ($248 million) for the year to March 31, 2012 was better than the average 5.66bn yen projection in a survey of 21 analysts by Thomson Reuters.

Mazda forecast a net profit of 1bn yen, swinging from a 60bn yen loss last year.

To seek growth in emerging markets, the Japanese carmaker also announced plans to build a new factory in Mexico.

Mazda said it would build a $500m factory in the central Mexican state of Guanajuato with trading company Sumitomo Corporation, beginning production in the business year starting in April 2013 and mainly to serve Central and South America.

It will build the Mazda2 subcompact and Mazda3 compact cars, as well as engines and the factory will have an output capacity of 140,000 vehicles a year and employ about 3,000 at maximum capacity.

Mazda will own 70pc of the plant, while Sumitomo will hold 30. The partners will also set up a sales company in the fast-growing Brazilian market.-Reuters