HIROSHIMA, Japan -- CEO Masamichi Kogai is piloting Mazda Motor Corp. through a massive transition more befitting automakers double its size.
It starts with a diversification of drivetrains to meet more stringent emissions rules. A diesel engine finally arrives in the U.S. with the redesigned CX-5 cross-over next year.
And then Mazda brings in an electric vehicle and plug-in hybrid.
Meanwhile, Mazda is working on a new generation of Skyactiv technologies that will be rolled out by March 2019. Kogai is banking on the Skyactiv 2 lineup to burnish Mazda's image as a sporty, unique brand and lift it one rung above its mass-market rivals.
To support the upmarket move, Kogai also is overhauling the U.S. incentive structure.
Kogai, 62, speaking through an interpreter, sat down with Asia Editor Hans Greimel on Nov. 18 to discuss his outlook for the U.S., the potential for diesel sales in the U.S., the company's cooperation with Toyota and the future of Mazda's trademark rotary engine.
Q: Has the U.S. peaked, and what is the outlook for next year?
A: Looking at the past three months, it seems like it may have hit the peak. However, the unemployment rate in the U.S. is still low, and the U.S. economy itself hasn't really slowed. So overall consumer sentiment can be maintained. U.S. demand continues to be strong.
Mazda's sales are down this year; how will it perform in the flattening market?
We should not allow too much inventory to build up. In the first half [of the fiscal year ending March 31, 2017] we struggled a bit, so we ended up with a year-over-year decrease. But that coincided with a new sales approach that we started at dealers.
In the latter half of this fiscal year, we are going to increase our momentum. Looking at the overall fiscal year, we expect a 6 percent increase. There will be significant model upgrades in the second half, and new models such as the MX-5 RF and the new CX-5 will lead to strong sales next year as well.
On a calendar year basis, where will Mazda's U.S. sales go in 2017?
We should achieve at least a 5 percent increase. There will be new models, but the entire lineup will also contribute. Instead of just focusing on individual models, our communications will focus on the entire brand. We have the slogan "Driving Matters" in our advertising. That's the primary brand communication.
Are you seeing signs of a brewing price war in the U.S.?
Yes, especially in the sedan C-segment, where the Mazda3 is placed, and in the C-D-segment, where we have the Mazda6. These segments have more intense competition.
Doesn't that undermine Mazda's Right Price strategy of trying to improve transaction prices?
The price at which customers are purchasing our vehicles is another point. If you look at average prices by segment, the CX-5 has attained a higher average price range than its Japanese competitors. The same goes in the C-D sedan segment with the Mazda6. At Mazda, we have a higher percentage of vehicles sold in the upper grades. The same can be said for the C-segment with the Mazda3. The higher grades are selling quite a lot.
What indicators is Mazda basing its new U.S. incentives on?
How well, for example, dealers conduct employee training. Also, customer satisfaction with the service of vehicles. Whether salespeople give sufficient explanation of the products.
We want to focus on mid- to long-term goals, not short-term ones. The mid- to long-term goal is to improve the rate at which customers come back to Mazda to buy new cars. Of course, we still have incentives for achieving volume, but that ratio has been reduced.
We want to avoid boosting volume by discounting. If we do that, customers who buy that way will go to a cheaper brand when it's time to buy a new vehicle. If we pursue that approach, we won't be able to improve our customer retention.