CHICAGO -- There's 2 percent. And then there's a "good" 2 percent.
That's how Mazda's North American chief frames the objective of the brand's "Mazda Premium" strategy, a potentially 10-plus-year journey to elevate its image in a way that brings higher brand loyalty and dealer profits.
Masahiro Moro said the Japanese automaker wants to transform Mazda's roughly 2 percent U.S. market share into a "good" 2 percent that commands higher average transaction prices with lower incentives, and he wants to offer a better customer experience.
"I am not comfortable with 2 percent. I'm comfortable with a good 2 percent," he said last week during an interview here. "A good 2 percent means our dealer network becomes profitable and becomes sustainable."
Mazda's U.S. dealers had a tough 2016 as sales slumped, eroding dealer profitability and leading to high vehicle inventories.
Moro, who started heading Mazda North American Operations in January 2016, declined to disclose what percentage of Mazda's 598 U.S. dealers are currently in the black. However he stressed that the goal is to have the overall network's profits "steadily increase" through improved customer experience efforts and brand loyalty.
IHS Markit reports that Mazda's brand loyalty was 39 percent in 2016 -- a nice increase from 30 percent in 2011 but well below the industry average of 53 percent.
The ultimate goal, according to Moro, is to have "the highest brand loyalty" in the industry. But for now, the goal is 50 percent or better.
"If your loyalty is lower, too much conquest, your business is never going to work," he said, adding that Mazda's customer loyalty through February was 43 percent.
Moro said Mazda isn't going to push for increasing its market share until its brand mix is better aligned with the Mazda Premium strategy.
"Until we reach that high-quality business operation, it is not my intention to push volume by diminishing or putting a low priority on improving the business foundation," he said. "That's why I'm saying let's go to a good 2 percent first."
Moro said those sales then become a "foundation" for dealers to accelerate growth in both sales and fixed operations, leading to a "great opportunity" for dealers to be more profitable.