LOS ANGELES - Mazda Motor of America, seeing an opportunity to pare weak dealers, is cautiously interested in Ford Motor Co.'s radical plan to consolidate dealerships in various cities.
Mazda was informed early in the development of Ford Motor's consolidation plan for Salt Lake City, said George McCabe, senior vice president and general manager of Mazda Motor of America Inc.
Ford wants to replace 17 dealerships in Salt Lake City with five superstores and 10 satellite service centers under the Ford-Lincoln- Mercury-Mazda banner.
But Mazda has made no decision to join the plan in Salt Lake City and other markets, McCabe said. Ford has said it is considering dealer consolidation in up to eight metropolitan areas.
Ford's plan poses intriguing questions for Mazda. The superstores would help Mazda cut weak dealers and reduce distribution costs. But would selling vehicles in a Ford superstore strengthen or weaken Mazda's shaky brand identity?
McCabe is not worried that the Mazda brand would be undermined in a Ford superstore.
'There is not a lot of cross-shopping between Ford and Mazda. So no one is interested in consolidating the Mazda brand in with Ford,' McCabe said. 'The real future for Mazda is to keep the brand separate and distinct from Ford, and Ford knows it.'
A LOT OF WORK
John Devine, Ford Motor's chief financial officer, said the superstore plan 'has to work for Mazda as well as Ford. Mazda has some more work to do. Their market position has to improve, and they really have a lot of work to do on the distribution side.'
Mazda dealers sold 264 vehicles per U.S. dealership in 1996, down 16 percent from 1995 and well below Toyota's industry-leading 906 per dealer last year. On Jan. 1, Mazda had 897 franchises.
While Mazda Motor of America was involved in the planning phase of the Salt Lake City experiment, Ford did not invite the five local Mazda dealers to the meeting at which the plan was unveiled to its dealers. Ford's dealers have yet to approve the idea.
'Ford has not said we have to be involved. They're asking if we want to,' McCabe said. 'There is no mandate from Ford saying we must participate.
'It speaks to the relationship between Ford and Mazda that Ford is making this big opportunity available to us. We don't have the resources to be experimenting on our own.'
A Mazda dealer in the Salt Lake City area, who declined to be identified, said the superstore plan raises many questions.
'Mazda's main push right now is that they want more dedication from their dealers,' he said. 'But by doing this (superstore plan), it seems they are defeating the purpose.'
He added: 'I want to stay where I am, but I would look at the superstore idea because I'm open-minded, and the car market is changing. It would be a win-win either way for me.'
Under Ford's plan, dealers in the target markets would sell out to new corporations controlled by Ford. The new entities would be owned jointly by Ford and the dealers.
Ford does not like to characterize the plan as a buyout. The company calls it a joint venture and wants the dealers to become managers and buy stock.
In February, McCabe forcefully told Mazda dealers at the National Automobile Dealers Association convention that dealers selling fewer than 10 units a month should sell their stores.
Joining Ford's superstore concept might be one way to pare the dealer count, although Mazda still would have to buy out its own dealers, McCabe said.
'For us, it's not just a question of having more dealers than we need. It's the whole question of distribution and where we want to be in the next century. Ford's plan is not the ultimate solution to all of our problems, and we haven't even made the final decision on whether to do it. But we would be irresponsible to our dealers and the company to not look at this,' McCabe said.
Mazda is cautiously interested in joining Ford's superstore ventures in other metropolitan areas, McCabe said.
'We won't do it for just any market,' McCabe said. 'It has to be a good fit for Mazda, and not just for Ford. If they identify other markets, we have to see if it's a good fit for us first. But conceptually, it's very intriguing and has a lot of upside potential for Mazda.'
Salt Lake City is a good experiment for Mazda because it is a self-contained market. Mazda has five strong dealers there, two of which already are dualed with Lincoln-Mercury stores, McCabe said. Also, two of the Mazda stores are merging.
Staff Reporter Mary Connelly in Detroit contributed to this report.