Mazda Narrowing Its Road to Consumers
Having just returned to profitability in its fiscal 2001, Mazda Motor Co. will steadily roll out new vehicles to boost its standing in the U.S. market, but senior executives pledged Wednesday that they no longer will try to cover all market segments.
“We’re not going to be all things to all men. We’re not big enough,” said incoming Mazda President Lewis Booth, who takes over the reins of the Japanese auto maker next month. Booth made his first public comments since being named Mazda’s top executive; he’ll succeed Mark Fields at the end of June. The two executives met with Wall Street analysts and the media in New York on Wednesday.
Mazda will discontinue its two largest cars in the U.S. market, the $18,000 to $20,000 Mazda 626 and the flagship Millenia, which sells for up to $32,000, and replace them with the all-new Mazda 6, which was unveiled Monday in Japan.
The Mazda 6 will go on sale in the U.S. in December, and will have “the heart of a sports car,” as will all Mazdas now being developed, Booth said.
Rival auto maker Nissan Motor Co. has been generating much of the positive news in the Japanese auto industry lately, with Nissan’s revival plan leading to the announcement last week of a record profit of $2.96 billion for its fiscal 2001. Nissan has nine all-new models to hit the U.S. market in the next two years.
Mazda turned a $71-million profit in fiscal 2001--after losing money in three of the previous five years--but has announced just two all-new models, the 6 and the RX-8 sports car.
“Mazda decided not to introduce new models, while other Japanese competitors were introducing tons of new vehicles. That was our main concern,” said Hiromichi Mizuno, a banker with Sumitomo Trust & Banking Co., one of Mazda’s two main creditors.
“The question was, how can they achieve revenue growth and net debt reduction without new models?” said Mizuno, who attended Wednesday’s presentation. “But they did, and that’s noteworthy.”
Mazda’s current U.S. lineup includes the Miata, Protege sedan and wagon, 626, Millenia, the compact pickup truck, MPV minivan and Tribute sport utility vehicle.
By discontinuing the Millenia, Mazda will lose a vehicle competing against sedans such as Honda Motor Co.’s Acura TL and Toyota Motor Corp.’s Lexus ES 300.
“They sort of have things covered, but it’s not very deep and it’s not very new. That’s their problem,” said Michael Flynn, head of the Office for the Study of Automotive Transportation at the University of Michigan. “Mazda is getting a little bit long in the tooth, and these days that matters in the consumer market. That’s where Nissan is doing quite well.”
Mazda is evaluating whether it will keep the pickup, at the bottom end of its market.
“It’s not an affluent segment, it’s not even a growing segment, but it introduces people to the Mazda brand,” said Charles Hughes, president of Mazda North American Operations, based in Irvine.
Booth said he will continue Mazda’s “Millenium Plan” launched in 2000 to cut costs, work more closely with Ford Motor Co., which owns a controlling share of Mazda, and launch more products, though he would not give details about other coming models.
