HIROSHIMA (Nikkei)--Mazda Motor Corp. will overhaul operations in Japan, the U.S. and Europe to improve its earnings, which are hurt by the strong yen, company President Mark Fields told The Nihon Keizai Shimbun on Tuesday.

Japan's fifth-largest automaker will likely report a group net loss of 12 billion yen for the first fiscal half due to a sales slump in North America and the yen's appreciation against the euro.

The company expects a consolidated net profit of 12.5 billion yen for fiscal 2000 thanks to the restructuring moves. Mazda's net profit on a group basis dropped 32.4% to 26.15 billion yen in the fiscal year ended March 31.

Foreign exchange has a significant impact on Mazda's bottom line because the company exports 64.9% of its cars. Each 1 yen appreciation against the dollar generates a foreign exchange loss of 3 billion yen a year.

To reduce the negative impact, Mazda over the next three years will increase parts procured from overseas to more than 20%, up from 11.6% in fiscal 1999. It is also considering starting production in Europe, a move on which Fields said the company will reach a decision by year-end.

Sales edged up 1.3% in the U.S. in 1999, even as the market there as a whole grew 9.7%. The automaker attributed the disappointing performance to the strong yen and the fact that 80% of its dealerships also sell models from other automakers.

To streamline its sales network, Mazda will close up to 40% of its dealerships in North America over the next three years, bringing the total from 929 as of Dec. 31, 1999, to between 550 and 600.

(The Nihon Keizai Shimbun Wednesday morning edition)