Zoom-Zoom Is Mazda’s DNA, Says President James O’Sullivan

By Marty Bernstein
AIADA Contributing Editor
Special to The Auto Channel

Advertising slogans, with rare exceptions, do not resonate with most consumers, especially in the automotive category. They’re the clever little phrase at the bottom of a print ad or intoned by a mellifluous announcer at the end of a commercial. Most are forgettable and superfluous.

Mazda’s “zoom-zoom” slogan is vastly different,” noted James O’Sullivan, president and CEO of Mazda North American Operations in a recent interview in Las Vegas during the NADA convention. “It’s our advertising slogan worldwide, but ‘zoom-zoom’ is more than that. It’s used throughout the organization to describe our vehicles, plans, engineering, design and manufacturing – every department is ‘zoom-zoom’ focused.”

 

Recent results prove this to be correct. After a corporate stumble in the ‘90’s when it was overly ambitious, a reorganization, restructuring plan urged by Ford Motor Company (which now owns 33.9percent of the company’s stock) just ten years has been very successful.

 

In 2006, 1.142 million passenger cars were produced and a 46 percent increase in profits for the October-December 2006 period to ¥14.9 billion or $123 million was reported. This growth has come from developing vehicles that are responsive, fun to drive, cute and affordable.

 

Zoom-zoom is the literal translation of ‘soul of sportscar’ and it is evident in styling and sales. The company has a huge following among automobile race fans and drivers, which is obviously part of their DNA. Their two seat convertible just reached its 800,000 unit last month – a new record that is being certified by the Guinness World Records Organization.

Mazda’s sporty little two-seater Miata reaches 800,000 units in January

 

This week, Mazda claimed top place in one of the worlds largest-ever reports on vehicle reliability by Warranty Direct. Nearly 92 percent of the Mazda’s studied, including the MX-5 Miata, aged between 3 and 9 years old suffered zero mechanical failure of any type – out performing all other brands. According to the Warranty Direct media release, 450,000 vehicles were surveyed from 33 manufacturers in the U.S and the U.K.

 

Next month, Mazda’s highly anticipated new Hakaze concept vehicle will be introduced at the 77th Annual Geneva International Motor Show.

 

There’s lots of good news from Mazda, so my first question to O’Sullivan was about profits and what they do for the beleaguered Ford Motor Company.

 

MB: How does it feel to be Ford’s biggest profit center now?

JO’S: We’re part of the Trust Mark Brands, which do not get broken out individually. We’re a separate public company in Japan. We had record profits last year and are on track for record profits this year.  

 

MB: Ford has had an interest in Mazda since 1979, how does the affiliation function?

JO’S: We’ve got a great relationship with Ford. There are a lot of good synergies back and forth between the organizations in many areas. Ford is working through their issues. I think they’ve got a great plan which is going to work. For us at Mazda, our business is still very competitive and challenging.

 

MB: Congratulations on sales increases here in the U.S.  

JO’S: Thanks, we were up 6 percent – best January we’ve had in 13 years. Business is good. Last year business was up 4 percent – best year we’ve had since 1991. Mazda had a record 2006 in Canada, our 8th consecutive month of growth. And in Mexico, which started a year ago last October, we’ve done very well.

 

MB: You’ve just introduced a new crossover … is the crossover the next SUV?

JO’S: I grew up with the Ford Country Squire and Colony Park station wagons – looking out the back window cruising down Woodward Avenue. I’ve seen station wagons go to full-size vans to conversion vans then to mini-vans and mini-vans go to SUVs and the bigger SUVs. It’s change. Now it’s crossover’s turn to become the next big wave and growth in the industry. 

 

MB: What, other than gasoline prices, is causing this change in consumer needs?

JO’S: Crossovers, as you well know, provide car characteristics. They are easier to drive and maneuver with better fuel economy.

 

MB: Mazda just introduced a new crossover, hasn’t it?

JO’S: Last year, we had the CX-7 and we just launched the CX-9. And we’re getting ready to launch the new ’08 Tribute very soon. We’re going to the heart of the market.

 

MB: Are you changing the direction of the company with these family-oriented vehicles?

JO’S: We’re still the zoom-zoom car company and are not losing our way.

 

MB: Do you think there is still a place for the big, gas guzzling SUV?

JO’S: A lot of people don’t want to give up their full-size truck or SUV. They like the utility, the ride height; they like the packaging; they like to be able to move cargo and kids, and have lots of room. 

 

MB:  How many Mazda dealers are there in America and how many are exclusives?

JO’S: Almost 700 in the United States now and almost half will be exclusives by the end of our fiscal year in March. Four years ago we were running about 20 percent exclusives.

 

MB: That’s almost double on a percentage basis, what caused this growth?

JO’S: They’ve invested heavily with us and us with them. That’s how we’ve gotten to the almost 50 percent. It just doesn’t happen overnight. There’s been a lot of hard work and dedication. Our dealers overall are pleased.

 

MB: What else has contributed to your dealers’ investments? How are your dealers reacting to the new vehicles?

JO’S: They’ve seen the future of the brand. They see Mazda as this great Japanese car company that’s differentiated itself from the other, more main stream other Asian brands like Honda, Toyota and Nissan with our more sporty designs  

 

MB: A few years ago Mazda announced a new store design program, how is that proceeding?

JO’S: We call it the Retail Revolution and have about 70 stores now and another 50 to 60 in different phases. But for us it’s not just about brick and mortar. It comes down to the processes in the dealership that are important to drive customer satisfaction.

 

MB: What kind of processes? Sales … service … technology?

JO’S: Our average age is quite good and it’s come down because we are conquesting so much to younger buyers, the 20–30 somethings. This group is very Internet savvy and has free access to information, and the retail stores must respond to that. Our Retail Revolution stores provide a non-pressure environment, great access to the web throughout the store by the customers or the dealer sales consultants. If they want to see an article or want comparisons it’s there for them.  

 

MB: Tell me about Mazda’s racing heritage and Laguna Seca.

JO’S: People think racing is NASCAR, Busch, Craftsman Truck Series, Indy …, but more Mazda’s race on weekends that any other brand and it’s all grassroots. We are actively supporting this with Mazdaspeed factory performance vehicles and warranted parts programs.

 

MB: What is the biggest program?

JO’S: The fastest growing road-racing class in the U.S. is the SCCA’s Spec Miata class with nearly 1,800 first- and second-generation Miatas. It’s the most raced production car in the world. And we just signed a contract with Skip Barber Racing School and renewed our agreement with Laguna Seca.

 

MB: Is everything upbeat at Mazda?

JO’S: I was with Phil Brady (president of NADA) and other key dealers – yeah, we have our issues, but so does everyone. But we’ve made steady progress the past several years. Our results from the NADA summer survey showed a major change.

 

MB: What do you think the balance of this year will bring?

JO’S: The future looks bright for Mazda. Of course, there’s still a lot of work to do, but we’ve got the dealers behind us, which is important; our employees are in really good shape; and, the Mazda brand is differentiated, which allows us to attract some great customers.

 

MB: Sounds like zoom-zoom to me …

JO’S: We’re this little car company from Hiroshima, Japan – to be able to do things that have great energy when you’re going up against the biggest manufacturers’ in the world volume wise –zoom-zoom is engrained in our culture. 

 

MB: What is a big marketing challenge/opportunity? Is it the web or CSI?

JO’S: Both. How do you bridge Internet traffic into the showrooms? Sure, we get traffic at our website, but we need to really bring them into our dealers’ showrooms. It means carefully balancing the advertising portfolio between the various choices and mediums.  

 

MB: Building a good CSI for a dealer through the back door is service, isn’t it?

JO’S: Absolutely! We are using technology in our new stores to really satisfy the needs of the customer. As we move toward more new retail stores, the use of technology will also increase. As the technology evolves, we must evolve too and that includes service.

 

MB: Do you agree with the statement, “The Internet is changing the automotive marketplace”?

JO’S: Yes, it’s changing everyone’s business models and I’ve been in this business for over 30 years. I’m the third-generation automotive. My grandfather started at the Rouge Plant the day it started up, my father was on the Ford Mustang and Ford Falcon programs. So, the automobile business is in my blood.

 

O’Sullivan spent most of his career at Ford most recently with the Lincoln Mercury division, which has an older customer profile. Just three years ago the veteran automotive exec was promoted to head Mazda, a brand with a youthful image and customer base. As a result, it seems zoom-zoom is now part of O’Sullivan’s personality too.