Mazda marketing gets 25% bump in 2012
EDITOR'S NOTE: This story has been changed to correct the spelling of Michael MacDonald.
LAS VEGAS — Mazda North American Operations will use the launch of its Skyactiv powertrain technology and the arrival of the new CX-5 crossover as the impetus to boost its marketing spending by 25 percent this year, executives told dealers at the make meeting.
The CX-5 also will be used as a way to retain Mazda3 owners who previously would have left the franchise because the Mazda6 is not good enough.
The CX-5 goes on sale April 2, while the redesigned Mazda6 will arrive in early 2013. Teaser ads discussing Skyactiv in the Mazda3 began during the Super Bowl.
"The Mazda3 buyer walking to the CX-5 is a natural," said Michael MacDonald chairman of the Mazda National Dealer Advisory Council and owner of two Mazda stores near Salt Lake City.
MacDonald said Mazda's captive finance arm, through Chase, has created an incentive program to pull Mazda3 owners from their leases early to get into a CX-5.
Jim O'Sullivan, CEO of Mazda North American Operations, said he expects the CX-5 to be the second-best-selling Mazda nameplate. A good month could realize 5,000 CX-5 sales, he said, although the crossover will be competing against segment leaders such as the Honda CR-V, Toyota RAV4 and Ford Escape.
Although Mazda executives declined to give a national marketing budget for the fiscal year starting April 1, a source said it would be about $325 million.
While not confirming the dollar amount, John Abel, Mazda's director of marketing, said the brand has already been spending at an accelerated rate since July.
"The dealers see this is a now-or-never moment," Abel said. "We won't have a better product opportunity, so we are coordinating the spend."
One reason for the spending increase is that the U.S. market is the only one of Mazda's three main regions — the others are Japan and Europe — that has a realistic chance of volume growth. That has allowed Mazda headquarters in Japan to loosen the purse strings.
MacDonald said Mazda dealers have started creating local marketing groups to pool funds and are similarly ramping up their advertising spends.
"Product has been in a trough for the last year or two," said multiline dealer Shaun Del Grande, president of Del Grande Dealer Group in San Jose, Calif. "We've been grinding for a couple years. This will be a shot in the arm. Mazda needs to just get onto consideration lists, and we can get our unfair share of the market."
Although Mazda is hearing of demand from many fleet clients, it likely will keep its fleet sales at around 10 percent instead of chasing volume, O'Sullivan said. But near-term, Mazda is doing a deal for the Mazda6 with Enterprise.
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