It has been the first good year in a while for Mazda North American Operations. Sales rose 8.4 percent in 1998, the first annual increase since 1994. While many Tier 2 Japanese marques are looking urgently for ways to compete, Mazda is getting resources and guidance from Ford Motor Co. Mazda NAO President Richard Beattie was interviewed by Staff Reporter Mark Rechtin in Los Angeles in December. What follows is an edited transcript.
How is the Protege launch going?
Sales are up 30 percent over the old version, and we're hitting our target market of younger consumers. A dealer told me he saw one of our ads one night, and the next day a couple of kids came into the dealership who looked like they were right from the ad. And that's a story that isn't told very much. People like to pick apart advertising when it's wrong, but don't talk about it when it's done right.
But with the success of the Protege, things have been quiet of late with the 626. Do you only have a marketing budget for one big product push at a time?
We're getting bombarded by Camry and Accord, so we've been keeping quiet on 626 on purpose. I'm very interested to see what happens to Camry and Accord sales in January, what with the way they're pulling all those sales into December, especially Camry's lease subvention.
The secret to an effective lease is a monthly payment based on an interest rate and residual value, one that's set so that the customer wants to get into a new car at the end of a lease, but that isn't so low that the dealer just sends the vehicle off to auction. I think all those Camrys are going to be sent off to auction, that dealers aren't going to hold on to many of them.
What is your forecast for Mazda for 1999?
I expect to see sustained growth like this year. We're still in a turnaround mode, and I want to keep that going. We have a new MPV coming mid-year, but the current one is out of production, so we have a short-term sales challenge there.
What about the size of the marketing budget?
If our competition keeps spending money next year at the same rate they have been this month, I can't compete.
How badly has not having a sport-utility hurt Mazda?
We would be doing substantially better, especially in the past couple years. We're missing out on a key segment.
From the looks of the Detroit auto show display, Mazda appears to be more and more under the Ford umbrella. And yet you insist Mazda has autonomy.
The display reflects the reality of Ford ownership and management control. It showcases Ford's global brands, so it makes sense to have Mazda included. Actually, if you look at Mazda's U.S. market representation, most of our dualed dealers are dualed with General Motors franchises, so it makes sense to put us in the Ford family at the auto show.
In the time since Mazda first debuted the RX-01 concept car, you could have brought a production version to market. Is there a future for what used to be the RX-7?
It makes emotional sense, but unfortunately no business sense. We have far more important priorities to worry about. We have basic business issues to sort out, and when we get that on track, then we can think about vehicles that mean more to the brand than to the bottom line. But that won't be any time soon. You can only introduce those types of vehicles when things are good.