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Mazda Chasing Margins, Not Market Share

Mazda Chasing Margins, Not Market Share

In the grand scheme of global automakers, Mazda is hardly a large player. The brand currently enjoys a small 2 percent market share in the U.S., but Mazda’s North American chief tells Automotive News the company isn’t really seeking additional share. Instead, Mazda wants to creep upmarket to boost margins across their business.

Masahiro Moro has worked at Mazda his whole life, but was put in charge of the company’s North American operations in January 2016. His primary task is to implement a decade-long strategy the company refers to as “Mazda Premium.” The strategy has a few goals, but is primarily focused on achieving a “good” 2 percent market share.

What exactly is “good” share? Well, Moro put the definition in his own words to Automotive News: 

“A good 2 percent means our dealer network becomes profitable and becomes sustainable, with brand in mind and customer experience in mind. That is the foundation for us to reach the first gate,” he said.

Basically Mazda is wanting to creep upmarket without saying that they’re going for a full-on luxury brand image. The logic behind the move is to boost margins both for dealerships and the company, although Moro’s comments suggest dealership profitability is the biggest initial concern in the Mazda Premium strategy execution.

In addition, Moro also has the goal of boosting Mazda’s buyer loyalty in the U.S. Mazda has increased their buyer retention rate from 30 percent in 2011 to 39 percent last year. While that’s good, Moro is seeking a loyalty rate higher than 50 percent.

Asked if Mazda would cut any nameplates from its lineup to accommodate shifting consumer preferences away from sedans to crossovers and SUVs, Moro said that’s not on the table. He went on to reference the fact Mazda recently killed the Mazda2 sub-compact and Mazda5 in favor of the CX-3 SUV, suggesting Mazda feels its lineup is in good shape.

 

 





 

About Nick Saporito

AutoVerdict Senior Editor Nick Saporito began writing about cars at age 13. Nick ran a couple of automotive enthusiast sites for several years, before taking some time off to focus on his career and education. By day he's a marketing executive in the telecom world and by night he hangs out here at AV. You'll find him focusing on tech, design and the industry's future.
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  1. Tone
    I'm a Mazda fan; I've owned four (1980 GLC Sport; 1990 RX-7; 2001 Protege LX2.0 and 2009 Mazda5). I appreciate they are affordable and fun-to-drive while being reasonably reliable (though not quite as good as Honda/Toyota -- especially on things like premature rust in the rear quarters). So, I'm biased towards Mazda, but I still have a hard time seeing how this plan will work if Mazda doesn't come up with two key technology strategies.

    First -- what's it's advanced powertrain strategy that addresses the trend towards electrification? It'll be tough for Mazda to develop stuff on it's own, so clearly it won't be a leader like Tesla or even GM. So, what's its fast-follower approach? Rumblings of single-rotor rotaries used as range extenders are quite interesting, especially considering the rotary's smoothless and efficiency at constant rpm. But, no word on an actual production strategy. And, if the world truly does move primarily to BEVs, I'm not sure how Mazda survives.

    Second: what's Mazda's take on autonomy? Mazda's whole brand is Zoom-Zoom; it needs to come up with an approach to 'drivers assistance' that matches the brand -- and meets the market -- or it's dead in the water. I can't imagine Mazda moving to making fleets of cheap autonomous vehicles. So, if there is still a small desire for drivers who drive, Mazda might be well-positioned. And, it's size isn't as much of a detriment in this case, as that market will be a premium niche ... the mass of folks driving Camrys will be more than happy to use an autonomous service. Those driving Miatas might not -- at least not all the time. But, Mazda needs to work out what their products look like in that world.

    I hope Mazda survives, but it's tough going in this market. They have survived this long, while figuring out how to market fun cars to a market that by and large doesn't value that, so I wouldn't count them out!
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