Mazda on the Move

Data Point: Mazda Buyers Guide

By Marty Bernstein
AIADA Contributing Editor
Special to The Auto Channel

Like most automakers, Mazda - Japan's third largest auto manufacturer - saw some momentous business and economic events last year. A global recession, changes to the company's longstanding partnership with Ford, shifts in consumer habits, and a new advertising agency were among the challenges and changes that the automaker faced. With great determination, Mazda has navigated each of these tests adeptly and effectively.

Sales Momentum

Despite the lingering recession, Mazda saw a 10.5 percent sales increase in 2010 sales. U.S. sales accounted for 66.4 percent of this volume. The truck segment registered 33.6 percent of U.S. sales. While sales of Mazda's CX-7 and CX-9 SUVs were hot, its Mazda3 compact were even hotter. The model registered its best December since 2007 with sales up 13.1 percent over December 2009

An optimistic Jim O'Sullivan, president and CEO, Mazda North America Operations noted, "Gains in consumer confidence and the fact that we've remained true to our brand were all factors in building sales momentum this year that we believe will lead to an even brighter 2011 for Mazda."

Although the automaker reported a 9.1 percent decrease in January 2011 sales, Mazda says the changes were due to a substantial reduction in fleet sales in order to help bolster rising residual values. It continued to experience success in the SUV segment as the CX-9 posted its best January ever with sales up 35.9 percent. Likewise, the CX-7 recorded its best January since 2008, with sales up 45.3 percent. The all-new 2012 Mazda5 arrives in dealerships this month which should help.

The Ford Relationship

In 1979, Ford joined Mazda in a partnership that encompassed a significant financial investment, product testing, and a training ground for executive talent. Last fall, in the wake of the recession, Ford sold a large portion of its controlling stock in the company, reducing its share to 3.4 percent.

Both companies continue to share several platforms, including the Ford Focus and Mazda3, and they indicate they will continue to share some manufacturing operations. However, the shift gave Mazda the ability to make more independent decisions regarding its relationship with Ford.

Takashi Yamanouchi, Mazda's representative director and chairman, president, and CEO, noted, "Both companies are committed to continuing our strategic partnership which spans over 30 years. Mazda and Ford will continue to collaborate on areas of mutual benefit such as key joint ventures, [and] joint project[s]."

Segment Shift
Mazda's DNA lies in its sports cars such as the MX-5 Miata and RX-8. The automaker expects that the changes to its business relationship with Ford will allow it to place greater emphasis on this sales segment. The company experienced a downturn in segment sales due to economic conditions in recent years. As one Mazda spokesperson put it during a recent interview: "People think sports cars are a fun investment as the third of fourth car in a person's garage. It's not an essential transportation decision."

A significant area of growth for the company lies in the SUV segment, which accounted for 34 percent of the automaker's business last year. 75 percent of Mazda's SUV sales came from its CX-7 and CX-9 models. The positive gains indicate that Mazda's "Zoom Zoom" potential could extend well beyond sports cars.

Changes to the Product Mix

Mazda's product mix has the auto industry abuzz. According to the rumor mill, the automaker will introduce a diesel-powered vehicle during the upcoming New York Auto Show. Mazda has also confirmed that it is working with Toyota to bring a Mazda hybrid vehicle to market in the near future.

In other news, Mazda reports that it is developing an electric vehicle with plans to begin leasing in Japan in spring 2012. The vehicle is expected to have a driving range of 200 kilometers and will be leased mainly to local government bodies and fleet customers. Another new product in development is the sleek Minagi compact crossover  that will be introduced at the Geneva Motor Show next month, which is expected to follow the brand's unique "soul of motion" design theme. A 2011 special edition of the MX-5 Miata - the world's best-selling, two-seat roadster - with a run of 750 units, was also unveiled at the recent Chicago Auto Show. 

Marketing

Last year, Mazda took its marketing in a new direction, hiring WPP Group with a new entity, named "Team Mazda." The team is expected to include various WPP marketing agencies and will be responsible for providing the strategic marketing and communications support for MNAO's U.S., Canada, and Mexico operations.

"We're in a new era of marketing that is continually changing and evolving," said Don Romano, Mazda's chief marketing officer and president, Mazda Canada, Inc. "Team Mazda will leverage the best of WPP's multitude of marketing and media specialties for a more integrated approach to our marketing-communications, and we're confident they will help us take the Mazda brand to the next level."

Conclusion

Mazda is a key player in today's auto market. Its vehicles are some of America's favorites, and through the highs and lows of the past several years, the brand has shown it has the resilience and ingenuity it takes to succeed on U.S. roadways.