This article appeared in Forbes Auto: May 23, 2016
Photo Credit: George Peterson
Mazda has always been a brand different from most. It built its image on rotary engines that were fun to drive, but tough to make. Challenges from emissions and fuel economy regulations doomed the rotary early in the 21st century. Production ceased in 2012 with the demise of the Mazda RX-8 sports car. Mazda’s gorgeous Vision R coupe shown at the 2015 Tokyo Motor Show demonstrates Mazda hasn’t given up on the rotary, but admits only a small group of dedicated engineers are presently working on it. But the rotary engine is just part of the Mazda story.
The Ford Days to Independence From 1979 through 2009, Ford Motor had an increasing equity stake in Mazda Motor. Starting with 7% stake in 1979, Ford increased its position in Mazda until it had effective control with 33.3% of the company. Mazda and Ford teamed up on several car platforms where Mazda’s design expertise opened the eyes of Ford engineers to new more efficient techniques.
As the Great Recession deepened and Ford was struggling for liquidity, Ford divested its shares in Mazda and the company became independent in 2009. The result was a stand-alone brand with good products, but low volumes. In 2011, Mazda raised $1.9 billion to guarantee its future viability and develop its SkyActiv platform now underpinning its cars and crossover SUVs. With the introduction of the Mazda CX-9 crossover SUV in mid-2016, the transition to SkyActiv is complete.
For Mazda’s 2016 Fiscal Year, the company sold a bit over 1.5 million vehicles world wide and had a net income of ¥134 billion (~$1 billion). Prospects are even better going forward as Mazda entered a technology sharing agreement with Toyota in May 2015.
Repositioning “Zoom Zoom” to “Driving Matters” Now the stage is set for Mazda to reposition itself. In the United States, Mazda wants to be perceived as an upscale mainstream brand similar to Acura. Acura has always seemed like an upscale domestic brand (and not particularly successful), so this positioning may make sense.
One of the first things Mazda has done to facilitate this change is change its advertising tag line from “Zoom Zoom” to “Driving Matters.” “Zoom Zoom” has been around seemingly forever, since about 2000. At first, Mazda’s products did not live up to the “Zoom Zoom” tag line, so now that they do, the tag line is changed to a more mature “Driving Matters”. “Zoom Zoom” is still there, but in a secondary position to “Driving Matters”.
“Driving Matters” fits with the attitude that people who buy a Mazda product are more enthusiastic about driving than buyers of most other mainstream brands. Mazda does not want to sell an appliance – transportation from point A to point B – they want to sell a vehicle with an active, sporty driving experience that their owners embrace.
Mazda Vehicles Deliver More of a Premium Ambiance Along with repositioning the message, Mazda’s products have been achieving higher transaction prices at their dealers. Much of this results from selling a richer mix of vehicles with about 50% of the CX-5 being the upper middle Grand Touring model and the CX-9 having a projected 40% being the Grand Touring model (then combined with the Touring model, Touring plus Grand Touring are expected to be 70% of the CX-9 mix). No longer wanting to be a “cheap and cheerful” brand, Mazda will not be the cheapest in any segment. It wants to be best. Simply, the brand is chasing a better quality of business.
Acura ALMS Race Car Enters Stage Left
Acura used its time at the 2006 New York auto show to formally introduce its 2007 RDX, which goes on sale in summer 2006; tease us with a near-production-but-still-concept version of the 2007 MDX (on sale in fall); and to announce it will enter into the American Le Mans Series in 2007. VehicleVoice and AutoPacific contributors were on hand when the racing engine roared to life on the stand.
Following the overview and reveal of the two SUV products, which had been announced before the show, Acura surprised one and all with a racing car hidden off to the left side of the stage. The decision to go racing with the Acura brand follows Lexus and Audi fielding teams, and comes before the next-generation NSX. Though the NSX has been sold as a Honda outside of North America all of its long years, the Acura brand is going global and the NSX replacement will more likely wear the Acura badge world wide. Acura will use a 3.4L V8 for its LMP2 car and develop the chassis with Lola and Courage. Step two will be to build a LMP1 car and earn an invite to the 24 Hours of Le Mans race in France.
Welcome to “Let’s Talk Cars.”
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The premier episode of Let’s Talk Cars covers the purchase of General_Motors‘ stake in Fuji Heavy Industries by Toyota Motor Corporation. Is GM finding ways to streamline it’s operations? How does Saab fit into the picture?
Noted industry analyst Jim Hall speaks with AutoPacific founder and VehicleVoice editor George Peterson to give you the inside scoop on this hot automotive topic.
If I hear another auto executive say that the B Segment is about explode I think I’m going to climb into the clock tower. The business plan goes like this. Exploding fuel prices will force all right thinking individuals to jettison their gluttonous SUVs and sprint down to the auto dealership to purchase more economical vehicles. Further increasing the prospects for success is a waiting herd of Gen Y new car buyers who are dying to drive a brand new cramped penalty box. The reasons that neither of these will happen are obvious. The former group needs utility and the later group needs cash.
While we will certainly get an increase of offerings in the segment, fuel prices and a demographic subset will not be the reasons for success for any entry into this segment. Unlike Europe, the US is not dominated by six-dollar gallons of gas and streets designed for horses. VehicleVoice (http://www.vehiclevoice.com) and AutoPacific (http://www.autopacific.com) research indicate the B Segment will only grow if a large portion of its entries fit the bill for US consumer acceptance.
The success of MINI in the US has led many to think that the segment is ripe, and that recent spikes in fuel prices are bound to give it stellar growth. The evidence is clear, however, MINI has succeeded with product. Product that inspires passion. Go figure. You only need to look at the Toyota Echo to understand why even B Segment buyers want some passion.
MINI has also identified that fact that there are only so many middle aged buyers who will pay 40% more for a vehicle that lacks the basic utility needed for everyday use. Passion starts the fire. The mind then takes over.
What will add to the prospects for this segment are vehicles that squeeze as much utility as possible into the sheet metal of a vehicle that inspires passion. Enter, the MINI Traveler Concept.