New product, marketing changes expected to help Mazda
Dealer since: 1992
Dealership: Bob King Mazda, Winston-Salem, N.C.
Other brands: Hyundai, Kia, Mitsubishi
Average monthly sales at Mazda dealership in 2012: 45 new, 40 used
Quote: "Being smaller from time to time is an advantage in that we can be nimble and we can be target-specific. Instead of being everything to all, we can be great to a select few that aspire to own a Mazda."
New product and new marketing are expected to help Mazda in 2013.
Inventories of the strong-selling CX-5 compact crossover have improved since its launch last year, and the redesigned 2014 Mazda6 mid-sized sedan went on sale last month. The brand will put a greater emphasis on targeted digital advertising.
Rob King, chairman of the Mazda National Dealer Advisory Council and owner of Bob King Mazda in Winston-Salem, N.C., spoke with Staff Reporter Ryan Beene about these issues and others that face Mazda dealers.
How was 2012 for Mazda dealers?
Overall it was very good. It was up a little bit over 2011, and the Mazda dealers I speak with are extremely optimistic about where we're going, especially with the Skyactiv technology.
Mazda has struggled to match the industry's growth over the last few years. Can Mazda reverse that trend this year?
I think so. As the CX-5 continues to grow and gain traction -- we were limited by some supply issues initially -- I think we're going to see tremendous growth there. We're going to see CX-5 sales -- at least it's my belief -- that are on par, one-to-one, with the Mazda3. That alone is going to provide pretty significant growth. We're excited about receiving the new 2014 Mazda6. Clearly that's an opportunity for us to grow in that segment.
The previous-generation Mazda6 struggled to gain traction with U.S. consumers. Will the new Mazda6 be a different story?
I think it will be different. We want to build and retail more cars than anyone in the marketplace, irrespective of how fun the car may or may not be to drive. I think the new Mazda6 really bears well to Mazda's DNA in that it's a smart alternative, it's fun to drive, it's all new -- not refreshed. So I think Mazda is the logical choice for the person who enjoys the driving experience and that perhaps aspires to own a car that's unique in the marketplace and not just a car you're going to see in every shopping center.
What are the major issues Mazda dealers face this year?
We're going to see tremendous pressure from Toyota, Honda and Nissan just for share of voice in the marketplace. I'm confident that our partners at Garage/Team Mazda will help us find unique ways to carve out our brand and our name. Mazda dealers are an experienced, cagey group of retailers who seem to year in and year out make it happen.
Simply because of its smaller size, Mazda is at a marketing disadvantage when compared with other Japanese automakers. What does Mazda need to do to stand out, and what has the factory said will be done to help it stand out?
What it's needed in recent years has been product. It has needed the ability to bring out product that is exactly what people are looking for, and I think we've had that in many cases. People who drive MX-5s are still passionate about that car. People who own CX-9s are passionate about that vehicle. Now we have the Mazda CX-5 and the Mazda6, which are immediately going to raise attention about the brand.
I think we're going to leverage the power of the press, and the cars are going to have tremendous reviews. I think the folks at Mazda will leverage the reviews and the great quality of the car. Mazda has a great following among its owners, so one would think the natural person to sell a car to would be in our service departments.
More importantly, being smaller from time to time is an advantage in that we can be nimble and we can be target-specific. Instead of being everything to all, we can be great to a select few that aspire to own a Mazda.
How does Mazda do that? Russell Wager, vice president of marketing, said more emphasis will be put on digital ads, taking some dollars away from TV spots.
I think that Russell and Garage/Team Mazda are spot on with a strong attack on digital with additional resources. We're all familiar with what happens in the funnel and the number of people who do their research online, so I think that we can find an opportunity when someone who may not understand exactly where the new Mazda6 is to chase that person. Once we're compared to our larger competitors, I think the uniqueness and the reviews on this product will drive traffic to our showrooms.
Has Mazda discussed specific digital advertising strategies it plans to roll out this year?
We're in the middle of that plan right now. Our fiscal year starts at the end of March. So even though we work on a calendar year from a retail standpoint, the planning for this company is on a fiscal year basis. As we roll out the plan it'll become clearer and clearer. I was in a meeting a couple of weeks ago, and it's very clear that there's a big opportunity for everyone, and particularly Mazda, to target very specific vehicles in the marketplace.
What are some key objectives that you want Mazda dealers to achieve during your term as chairman?
I'm honored to be a chairperson, but I will yield and say that I am not a leader. I am a caretaker of a great group of dealers throughout the United States. There are 15 retailers on the national council and each one represents their constituencies. My view and experiences would say that we want to continue to focus ourselves and continue to partner with Mazda and continue to gain share and increase our dealer profitability.
Are Mazda dealers profitable?
The engaged dealers are very profitable.
Suggesting that Mazda dealers who aren't engaged are not profitable?
If you're passionate about the brand, typically you'll do a better job. We're small, but we're unique, and we're great. In today's world of multifranchise ownership, one has to look at Mazda and say there's a tremendous opportunity in each store. We've got numerous overachievers in specific markets, and in any case there's an opportunity to do that with a brand such as Mazda.
What do Mazda dealers need to do to improve profitability?
Mazda has an initiative and an ongoing focus on service retention. For all retailers, not just Mazda, service retention is key to long-term profitability as this economy moves up and down and is more favorable or less favorable to retail auto sales. In this case, and I feel like I sound like the proverbial broken record, but we're back to square one because we now have product that's competitive to a point where we will not be forced to discount. The previous Mazda6, although it was a strong car, showed up during a perfect storm of disaster as far as launching marketing plans and getting the public to buy that automobile.
I think today we're in a better position from an economic standpoint. The retail numbers continue to improve every year. We have a plan. We're a tight-knit family that understands where we've been and we have a pretty good idea of where we want to go. Mazda's committed to continue to show growth through throughput in existing stores. Mazda's not looking to open up new franchises on every corner in order to get that type of growth. That's the right direction so that we can increase the volume per rooftop.
Has availability of the CX-5 improved from the lean levels seen following its launch?
It has improved. We still have some regional issues, but the car has far exceeded its expectations in almost every market. There seem to be specific pockets in the Northeast and in the Midwest where there seem to be still enough demand to where there's a waiting list for specific models.
How has Mazda's Dealer Performance Program worked out since it was launched in the third quarter of last year? What do dealers think about it?
Conceptually I think it's a brilliant idea. We've been involved with it since it was crafted. What we wanted to do was have everyone focused, obviously, on retailing automobiles, service retention, proper training and the customer experience. I think for the dealers who are really focused on hitting each segment, it's been very well received. There's always a learning curve with any new program. The great thing about working with Mazda is that if we need to massage an area of the program to engage more retailers, the leadership in California will always listen.
How do the payouts compare to Mazda's previous dealer cash program?
The prior program was basically a sales program and whenever you do that, there's always an opportunity to focus on discounting versus retailing and from time to time, one can lose focus on the big picture, and that's service retention and units in operation in the marketplace.
What [the Dealer Performance Program] tries to do is have us be aware of how important it is to have a great experience, through better training. It actually asks retailers to focus on retention and make sure clients come back, not only during the warranty period but when the warranty expires. And to make sure that we continue to sell as many vehicles as we can.