One to One – Tech boost will lead to sales boost says Mazda boss
Mazda is about to emerge from difficult times with a strong product-led programme and the prospect of significant growth, according to the brand’s UK Managing Director.
Jeremy Thompson believes a complete product renewal, resulting from the arrival of the brand’s SkyActiv technology, will transform fortunes for Mazda on the UK market.
The SkyActiv programme stretches right across engines, transmissions and platforms, and even into improved flexibility of production, and forms Mazda’s leading weapon in a bid to recover lost ground.
Speaking to CarandVanNews at the launch of the CX-5 Crossover – the first Mazda with SkyActiv – Thompson admits that times have been tough for Mazda in the UK, for several reasons.
A major issue has been the effect on profit margins from the strong yen and relatively weak pound. “We’ve been battling a difficult headwind – currency exchange rates have affected the brand in brutal ways,“ he says.
To react to this the brand has attempted to slash some of its biggest cost generators, focusing on its core markets of retail and user-chooser fleet; “There was a time when we were doing 10,000 units a year in daily rental and Motability business, now we’re doing very little”.
Mazda was also significantly affected by the Japanese earthquake and tsunami in March 2011. While the brand’s production plant at Hiroshima was undamaged, suppliers were seriously hit and small but vital components suddenly became very hard to get.
“For example it became very difficult to get the Mica that’s in virtually all our metallic paint, and Bluetooth unit supplies were also severely affected,” Thompson says, while adding that such problems are now in the past.
Still very much an issue on the UK market, however, is customer confidence. “It has not got better, in fact it’s got a little worse,” Thompson says.
He believes that many customers now have the money to buy a car due to recent tough economic times encouraging them to pay back previous debts. However with no obvious end to the current economic gloom they don’t want to spend their money.
Thompson is keen, however, to paint a positive picture for Mazda going forward, based on the SkyActiv-generated product that is on its way, and of which the CX-5 is first evidence.
“Some journalists have said that with the CX-5 we are late to the SUV party, but it’s better to arrive washed, showered and ready to take on the challenge.
“This car is going to make a significant impact which will go on for a number of years, earning 10 per cent of our UK sales – our dealers are pleased to be able to move into a secure segment with growing demand.”
The CX-5 launches on 18th May and while pre-orders are only currently in the hundreds, Thompson emphasizes that no-one has driven the car yet – dealers have had a showroom display model but are only now getting their demonstration cars. He expects orders to mushroom to a point where demand exceeds supply – “a good problem to have.”
And he has evidence for this – the CX-5 earned eight months’ worth of pre-orders on its Japanese home market and on being unveiled in Germany 4,000 pre-orders were taken. He is confident of achieving 4,000 cars a year in the UK.
Thompson accepts that dealers face a challenge in communicating to customers the sheer breadth of change that SkyActiv brings to the Mazda model range; “This is an all-new technology, there is no carry-over at all in the CX-5, not even legacy engines which most manufacturers do have even when they launch new models.”
Not all customers will want the detail; “Some just want to know “what’s in it for me” in terms of cost, mpg and the like, whilst others are interested in understanding the technology”.
Dealers are currently undergoing intensive training to help them sell what Thompson describes as a “magic bullet” sales story, and will be provided with aids such as digital tablets to make it easier to demonstrate advances such as the Smart City Brake Support while in the showroom.
SkyActiv requires forthcoming Mazda releases to be all-new, as it is not practical to apply elements of the programme to mid-life refreshes. Incorporating it across all model lines will take some years to complete.
Thompson won’t currently reveal the next SkyActiv release, but it is widely expected to be the Mazda6. An almost production-ready version of the car was displayed as the Takieri concept at the Geneva show in March, and many predict a production reveal at the Paris show in September.
Thompson accepts that his dealers have had a tough job in recent times; “they haven’t had a good business trading environment but they have a tangible, realistic expectation of a major improvement based on excellent product.”
He remains conservative about 2012, expecting to sell around the same number of cars as last year, but with the expectation that “we will be welcomed with open arms” if he needs to request more stock from Mazda Corporation.
And he expects to see benefits from some of the less obvious advantages provided by SkyActiv, notably the flexibility of production allowing different models to be built on the same line and stock minimised both at manufacturer and dealer level, with consequent benefits in such areas a residual values.
As Mazda moves into a product-led growth phase with lessons learnt – particularly “don’t over promise and don’t over produce,” Thompson is confident that the new flexibility of production created by Sky-Activ will allow a minimizing of stock both at manufacturer and dealer level, with consequent benefits in such areas a residual values.
First Crossover launches new era for Mazda – here
Words by: Andrew Charman