LOS ANGELES — Small doesn't have to mean cheap. At least that has been the recipe for success for the Mazda3 compact hatchback and sedan in America.
Now Mazda says it plans to adopt that idea for other vehicles in the model line.
Entering its final year of a five-year model cycle, the Mazda3 still surpasses sales objectives with minimal incentives. Executives are pleading with Japan for more volume.
Mazda initially expected to sell about 70,000 units a year in the United States. Last year, it sold 120,291.
Small, fuel-efficient cars are all the rage right now. But Robert Davis, Mazda North American Operations' senior vice president of product development and quality, says many buyers are hesitant to trade down from more luxurious larger cars because of what they lose in standard features and tactile feel.
Davis says Mazda has struck a chord by giving its small car upscale touches from higher-end vehicles. The interior of the Mazda3 has gotten high marks from industry insiders. Features such as leather seats and navigation systems are in the Mazda3, while not in competing compact sedans.
With consumers taking the bait, Davis says, the idea will spread to other vehicles.
He calls it "dragging a rake" through the vehicles in the next higher segment to "pull down the cool stuff" into less-expensive vehicles. All versions of the redesigned 2009 Mazda6 will have four-wheel disc brakes, usually optional at the base level for the competition.
Shannon Curfman, a set decorating buyer for film productions in Los Angeles, was swayed by Mazda's strategy. She bought her Mazda3 hatchback in 2006, trading in a Ford Explorer.
"I test drove a lot of other cars in the same size," Curfman says. "The Honda Fit felt like a cheap car. But as soon as I got out of the Mazda3, I said, 'I want this car right now.' This model had sunroof, leather and the Bose CD system, which I really liked. It felt much more luxurious."
Davis says adding content instead of raising incentives has proved effective.
"If we give people the right equipment, they'll pay for it because they know value and they know what it costs," he says.
Mazda says Power Information Network data show that adding standard features in lower-segment cars has a big impact on transaction price.
"We've seen the Honda CR-V net margin fall by the same amount as the incentive they offer," Davis says. "But when we add new standard features to the Mazda3, the net rises by the same amount."