Mazda and its dealers discussed a new exclusive showroom program and the prospect of a more aggressive captive finance arm at its make meeting.
The franchise program allows for cash assistance to dealers who build an exclusive facility or a stand-alone showroom that shares a back shop with another brand.
The incentive program takes effect April 1 and is in place for three years. Incentive support includes cash per car as well as a capped percentage of building costs (see related story, Page 32).
"We want to assist dealers who want to invest in Mazda," said Jim O'Sullivan, president of Mazda North American Operations.
Another reason for Mazda dealers to be upbeat: The automaker is looking at entering new segments.
Although declining to give details, O'Sullivan said: "We're not going to try to be all to everybody. We won't just slap a badge on another car and call it a Mazda. It has to fit the brand."
Dealer council Chairman Joe Shaker, a multiline dealer from Wellesley, Mass., said Mazda needs to "keep pushing into new segments," so that dealers can get more throughput. "We have to identify what's missing and fill the gaps," Shaker said.
Mazda sold 258,865 vehicles in the United States last year but told dealers it wants to hit 300,000 in 2004.
Randy Hiley, a multiline dealer in Arlington, Texas, said the best way for Mazda to hit that goal is to have the captive finance arm, Mazda American Credit Co., loosen its purse strings.
Hiley sees that happening both in terms of making riskier loans and in taking more risk with its residual values. He added, "But every dealer in every franchise wants that."
O'Sullivan said Mazda American Credit will take larger risks with first-time buyers of the Mazda3.
"We learned that with the MazdaSpeed Protege, which had an average buyer age of 26," O'Sullivan said. "They had good credit, just not a lot of it."
Dealers also believe that Mazda is underestimating the long-term value of the RX-8 sports car, for example.
"We want Mazda to take calculated risks," Shaker said. "We want to take advantage of our smallness. We can use the small supply as the basis for residuals. We can cut back on rentals, too."
On the advertising front, Shaker said Mazda will work harder with dealers to integrate their dealership ads with national and regional advertising.
In exchange, Mazda will allow dealers to get involved earlier in creating the national "zoom-zoom" ads.