MAZDA'S MASAHIRO MORO: On the road to premium

CHICAGO — Mazda is a small child up against a professional sumo wrestler in terms of its place in the global automotive industry.

At least that's how Mazda's North American chief, Masahiro Moro, characterized the automaker's 2 percent market share to reporters shortly after a National Dealer Advisory Council meeting here this month.

Moro, a Mazda lifer who started leading domestic operations in January 2016, is in the beginning stages of a 10-year or more "Mazda Premium" strategy aimed at turning the company's roughly 2 percent U.S. market share into a "good" 2 percent.

Moro, 56, sat down with Staff Reporter Michael Wayland to discuss the plan as well as other issues facing Mazda and the auto industry.

On Mazda's market share and what a "good" 2 percent means:

"A good 2 percent means our dealer network becomes profitable and becomes sustainable, with brand in mind and customer experience in mind. That is the foundation for us to reach the first gate.

"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.

"That's why I'm saying let's go to a 'good' 2 percent first. That becomes your foundation for each dealer to accelerate growth because in order to accelerate your growth, you have to have good loyalty and consistent conquest. If your loyalty is lower, too much conquest, your business is going to never work.

"Our ultimate goal is to increase brand loyalty. We want to be the highest-brand-loyalty brand, which is important for small companies or small brands in terms of scale to keep those strong bonds for life.

"In order to do that, I think, a brand experience, a customer experience throughout all touch points is absolutely critical."

On the recent hiring of Detroit ad veteran Dino Bernacchi as chief marketing officer for U.S. operations:

"It's important to have someone overarching our strategy to manage the entire customer experience. Our CMO is responsible to manage a customer's experience consistently through all touch points.

"Marketing sometimes means the brand communication. That's a very narrow definition. My definition of marketing is strategy ... so each operation has a clear view, consistent understanding about what we provide to customers."

Regarding Mazda loyalty rates, which improved to 39 percent last year from 30 percent in 2011:

"Mazda loyalty as of today is still much lower than industry average. ... We are climbing up right now, but our target is more than 50 percent. And then further up requires more efforts. But I believe that given Mazda's lineup, which covers maybe 55 to 60 percent of the industry, more than 50 percent [loyalty], closer to 60 percent is a very, very good number.

"Increasing loyalty is going to be a great, great opportunity for dealers. Their basic structure becomes more profitable."

On worries of industry sales plateauing or declining:

"If the market is getting tougher, I believe our philosophy becomes more important because our dealer partners have to retain their customers, keep [them] coming back to their service [department]."

On the Trump administration's EPA possibly rolling back fuel economy standards:

"Our focus is always to provide better fuel efficiency, not only for the label but also real-world, actual fuel economy. That is why we try to improve the combustion engine. ... We believe this is the way to contribute to the overall environment.

"This is not only [for the] USA, but elsewhere — China, Japan, Europe — environmental standards are only getting higher and higher."

On potentially cutting any sedans from the U.S., as consumer preference switches to crossovers:

"I don't have any intention to cut any nameplate right now because we already decided to cut Mazda2 and Mazda5 last year and introduce the CX-3. Our portfolio is clearly in good shape."