Mazda Denies Report of Closures
Denying a Japanese newspaper report that Mazda Motor Corp. plans to cancel up to 40% of its U.S. dealer franchises, officials at the company’s U.S. headquarters said Wednesday that they are, however, in the midst of a “revitalization” program that has led to the demise of about 100 dealerships since 1997.
“This is not fresh news,” said Jay Amestoy, vice president of public and government affairs at Mazda North American Operations in Irvine.
For the record:
12:00 a.m. June 30, 2000 For the Record
Los Angeles Times Friday June 30, 2000 Home Edition Business Part C Page 2 Financial Desk 2 inches; 37 words Type of Material: Correction
Mazda market share--Mazda Motor Corp.’s share of the new-vehicle market in the United States has declined in the last year, though its total U.S. sales have increased slightly. An article in Wednesday’s Business section said the company’s U.S. sales had declined.
Mazda is, in fact, following in the footsteps of industry giants such as General Motors Corp. and Ford Motor Co. in weeding out its weakest dealers to improve sales, profitability and customer satisfaction levels for its strongest franchises.
Nationally, the number of new-car dealerships dropped to 22,400 last year from 25,000 in 1989.
“There has been a real effort [by auto makers] to consolidate and to get the right dealerships into the right markets,” said Michael Morrissey, spokesman for the National Automobile Dealers Assn.
“Mazda is doing what everyone else is doing, and we have no problem with [franchise] reductions as long as they are done fairly,” Morrissey said. “And in our discussions with [present and former] Mazda dealers, we have heard no complaints.’
Rick Williamson, a rural North Carolina Mazda dealer and chairman of the company’s national dealer council, said, “Never, in all my conversations with Mazda people, have I ever heard that 40% number.”
“If it is accurate, it would be of major concern, but I’ve got to believe that this was just a misunderstanding,” he said.
Mazda North American, which has seen U.S sales decline in the last few years, has been reorganizing its dealer body for more than three years, Amestoy said, adding, “There is no final number, no goal for how many dealerships will be cut. It is an effort to make all of our dealers stronger and profitable. In some areas, we’ve even added franchises.”
The Japanese auto maker, in which Ford holds a controlling position, has about 750 dealerships in the U.S. and 150 in Canada. In California, Mazda has eliminated 21% of its franchises since 1997 and has 68 dealerships in operation.
Even though Mazda’s sales have declined, average sales per dealer have climbed almost 35% to 330 cars and trucks a year, Amestoy said.
And though auto manufacturers are eliminating dealerships, the loss of a single franchise doesn’t usually spell doom for the dealer.
At Mazda, about 85% of dealers have one or more additional franchises. Williamson, who had a solo Mazda store for almost a dozen years, said he has just added a Daewoo dealership to his Lumberton, N.C., operation and is negotiating to acquire a Ford franchise.
