Mazda and Mitsubishi Motors — Japan’s No. 4 and No. 5 automakers — reported half-year net losses on Thursday, battered by plunging sales and the strong yen.

Mitsubishi, which makes the Galant sedan and Outlander SUV, warned that the outlook for the global auto industry remains “severe,” but projected that it would eke out a small profit by the end of the fiscal year in March.

Mazda Motor Corp. said China was a bright spot, with sales rising 35 percent there, but that otherwise sales around the region dropped during the fiscal first half. Japan’s Toyota Motor Corp., the world’s No. 1 automaker, reports earnings on Nov. 5.

Mazda, which has overtaken Mitsubishi to become the fourth-biggest among Japanese automakers, reported a net loss of 20.8 billion yen ($230 million) for the April to September period compared to a net profit of 29.5 billion yen a year earlier.

Global sales during the six months dropped 37 percent to 990.3 billion yen, although the new Mazda 3, called Axela in Japan, showed strong sales, the Hiroshima-based company said.

Facing weak demand and the yen’s appreciation, which erodes overseas income, the company has tried to cut costs. It trimmed its forecast for full year losses to a net loss of 17 billion yen from 26 billion yen.

Sales in China jumped 35 percent to 85,000 vehicles, lifted by demand for the Mazda 6 and Mazda 3 models.

But in North America, sales fell 21 percent to 158,000 units, while European sales declined 31 percent to 123,000, largely on weakness in Russia. In Japan, sales decreased 15 percent to 105,000 units.

Mitsubishi Motors, meanwhile, reported a net loss of 36.4 billion yen ($403 million) for the April to September period, down from a net profit of 12.8 billion yen last year. Sales tumbled 53 percent to 573 billion yen.

“The situation facing the automobile industry continues to be severe,” it said in a release.

To boost competitiveness in the second half, the company plans to expand the number of environmentally friendly cars that qualify for tax breaks and subsidies to 15 from 10. It also plans to launch a new compact SUV in February.

Earlier this year, Mitsubishi rolled out a fully electric car called the i-MiEV that can be recharged from a regular home socket. The four-seater costs 4.59 million yen ($50,900) and will initially be sold mainly to local Japanese governments and companies. Deliveries are expected after March 2010.

The company also introduced the Lancer Sportback in September in the U.S., and plans a facelift for the Outlander in the American and European markets by next month.

Mitsubishi aims to be in the black again for the full year. It maintained its forecast of an annual net profit of 5 billion yen on sales of 1.5 trillion yen.

Its sales declines were particularly pronounced in Europe, where the number of vehicles sold fell 44 percent from a year earlier to 93,000 units.

Sales fell across all regions during the April to September period. In North America, sales dropped 35 percent to 46,000 units, while in Asia, Latin America and the Mideast sales fell 18 percent to 229,000 vehicles. In Japan, sales declined 8 percent to 77,000 units.