Mazda launched the redesigned Mazda6 mid-sized sedan and Mazda3 compact car in 2013. Those two cars plus the CX-5 that went on sale in 2012 have given Mazda dealers more fresh product than they have had in years.
Now the challenge becomes getting the message out after Mazda sales trailed the industry's overall sales growth last year. The brand's "alternative to premium" strategy of standing out from bigger, mainstream competitors is beginning to gain momentum, bringing dealers better transaction prices.
Tom Carey, a Mazda dealer for more than 20 years and the recently elected chairman of Mazda's national dealer council, spoke with Staff Reporter Ryan Beene in December about how Mazda dealers fared in 2013 and what lies ahead this year.
Q. How was 2013 for Mazda dealers?
A. Things have greatly improved over the last few years for Mazda dealers, and 2013 was quite the best in quite a long time. Frankly, I think the reason for that is -- and I'll say this after being involved for 24 years at a Mazda dealership -- we have the best product lineup in my view that we've ever had.
Not only did you get new products; they came relatively rapidly for Mazda, giving you more new product that accounts for more of your volume at one time than Mazda has seen in years. So it's puzzling why Mazda's sales grew at a slower rate than the market overall. Why did that happen?
The numbers are somewhat deceiving. There's fleet involved in what Mazda reports, and in 2013 they did a lot less fleet than in 2012. If you remove the fleet business from those numbers, Mazda is approaching a nearly 19 percent increase in pure retail sales.
Russell Wager has been Mazda's U.S. marketing chief for about a year. How would you grade his work?
I think Russell is doing a fabulous job. With his direction, we have a consistency to our marketing across all lines and a message that resonates and is, again, consistent, and it really helps us. I think prior to him coming in, we were jumping all over the place where now we're focused in marketing, and it's working. His "Game Changer" campaign ties into the Mazda DNA.
One of Wager's priorities when he arrived was to make digital ads a bigger part of what Mazda does, even if it means taking away from TV budgets. How has that played out? Is it working?
Yes, it is. They've done a really good job of being strategic and targeting the right demographics of customers who buy our cars with digital ads. Also, they're doing a fine job in television; again, it's more consistent than I've seen in years. With this "Game Changer" campaign, the ads are memorable, and they catch your attention.
For the Mazda6 and Mazda3, Mazda used what it calls an "inside-out" strategy of promoting the newer vehicles quietly to fans and hand-raisers for the first few months of sales before mass-market launches. Has that been effective?
It has been effective. For example, the Mazda3 right now, the new one, even though it's been on the lots for a few months, it's not yet kicked off its full campaign, which will take place in January. The thinking is to build inventories across the country in dealer lots, have a subtle and strategic digital campaign going on in the meantime, and then when the inventories are up there and we're beginning to get toward the spring, which has traditionally been Mazda's best market, we come on full blast with the television and the rest of it.
What major issues do Mazda dealers face in 2014?
We've got some exciting product coming. The Mazda2 is coming out greatly enhanced with a Skyactiv engine. The Mazda6 is going to be enhanced, even though it's so new, but they're enhancing that car, particularly the interior late in the year. And as I understand it, the CX-5 is similarly going to be enhanced in the upcoming calendar year. We've got the Mazda6 diesel coming out as well. This is going to be something very new to all of us as Mazda dealers and very exciting.
(Editor's note: On Jan. 9, Mazda said the Mazda6 diesel has been delayed beyond its April 2014 launch date.)
The challenge is we've got all this stuff, and we've got to make it work. With the consistent marketing that I talked about earlier, we're on the path to do it. We really seem to be coming together as a franchise. I've seen this for a long time, but I feel more excited about it today than I've ever been because of the products, the marketing and the general synergy that's coming together in the company.
It's a little company -- we're not the big guys, but we're a small, independent company that has to work a little bit harder to get its message out. And as dealers, we've got to do the same thing. We've got to work a bit harder than the big guys down the street to let people know what wonderful things we have to offer.
Part of Mazda's "alternative to premium" brand strategy has been reducing incentives and earning transaction prices that are close to a vehicle's sticker price. How is that strategy working out with all the incentives and discounting going on in today's market?
It's a very, very competitive market. One of the things about "alternative to premium" that's working in our favor is that thinking behind it is that the cars are built so well, and for the most part they have amenities that aren't found in many of the comparable competitive models. We want to sell our products by building value and not by cutting prices. If we can do that successfully -- and, remember, we're small, so we can focus on this maybe a bit more than a bigger company -- then that makes us unique and different.
Is it competitive though? Heck, yes, and we're not going to be naive and pursue this if it isn't working, but it's working now and I think it gives us a difference that puts us aside from other brands.
Mazda talked about starting a facility design program, calling it an "evolution" of the Retail Revolution store image program. What's new on that front?
It's my understanding that it is going forward. This latest enhancement is going to be called Retail Evolution. I don't think that Mazda has yet finalized really anything about it other than they're going to try to enhance the dealerships a bit. I don't think it's going to be anything radical. From what we're being told, it's going to be a gradual improvement, particularly on new stores going up. Those of us with the Retail Revolution green and orange look have nothing to fear, I'm told. We will still be quite relevant, and they may not even be changing the colors. Most of us are happy with the way Mazda dealerships have stood out on the street.
Has Mazda said when it plans to finalize the program details and roll it out?
It will probably be rolled out sometime in the late part of 2014 to the dealers.