Mazda Motor Corp. said Tuesday its annual loss shrank to 6.5 billion yen ($69 million) from 71.5 billion yen the year before thanks to cost-cutting efforts.

Japan's No. 4 carmaker made a profit in the last quarter of the fiscal year through March 2010 and said it expects a net profit of 5 billion yen for the current fiscal year through March 2011.

Hit by the yen's appreciation and weaker demand in all major markets save China, Mazda's annual sales fell 15 percent to 2.164 trillion yen.

"The recovery of automotive industry demand still lacks momentum, except in China and other emerging markets." Sales in China jumped 46 percent to 196,000 units for the year, helped by sales of the Mazda6.

Globally, Mazda sold 1.193 million vehicles during the year, down 5 percent from the previous year. Annual sales in North America slid 12 percent to 307,000 units, those in Europe dropped 26 percent to 239,000, while in Japan sales edged up 1 percent to 221,000 units.

Faced with a "challenging" business environment, Mazda said it worked hard to optimize inventory levels and accelerated cuts to fixed costs by over 100 billion yen, even though its domestic plants were operating at 80 percent utilization.

Those efforts helped Mazda turn in a net profit of 9.9 billion yen for the fiscal fourth quarter from January through March.