Mazda: Bringing fun-to-drive spirit to EVs

Mazda's fun-to-drive persona isn't going anywhere as the automaker steadily transitions to electric vehicles.

Mazda will retain that spirit no matter what powertrain goes into its vehicles, said Rob Meyer, chairman of the Mazda National Dealer Advisory Council.

Mazda is steadily moving into the EV realm. It's now selling the battery-electric MX-30 crossover in California, while a three-row CX-90 plug-in hybrid crossover is slated to debut in 2024 as a performance-oriented model. The CX-90 will be followed by the smaller CX-70 plug-in hybrid crossover.

The CX-90 is expected to replace the CX-9, a vehicle Meyer said has held its own over the years. He believes the upcoming CX-90 will be the right vehicle at the right time for Mazda, a draw for soccer moms and dads looking for something with a sporty edge.

Mazda is investing more than $11 billion into electrification through 2030 through a string of new partnerships that target everything from batteries and motors to computer chips.

Meyer, 53, co-owns Tim Dahle Mazda Murray and Tim Dahle Mazda Southtowne in suburban Salt Lake City.

He spoke with Staff Reporter Vince Bond Jr. about Mazda's approach to electrification, the impact of rising interest rates and how he's managed to fight through inventory shortages. Here are edited excerpts.

Q: While some automakers have been aggressive in introducing EVs, Mazda is taking a more measured approach. Do you feel Mazda is stepping into the electrified market in a sensible way?

A: Certainly. They revealed their plans to us. They have a new platform that they rolled out to us at our dealer meeting that has the ability to scale up on multiple different products. Don't feel like we have to be first, we just don't want to be last.

Do you think that Mazda's fun-to-drive persona fits well with EVs?

I think it certainly can. Mazda has committed to us that's our DNA and that's what we're going to be regardless of the powertrain they're using.

The three-row CX-90 will be your first plug-in hybrid in the U.S. What kind of advertising messaging will Mazda need around that vehicle?

I will tell you that from a sales standpoint, they have high aspirations for this car. It's the right car at the right time in the right segment. We hold our own with a 10-year-old car, the current [three-row] CX-9, and the CX-90 is the right car at the right time.

Who is the target audience for a three-row crossover that's a plug-in hybrid?

I would say all of the state of Utah. We have big families here. Even the current CX-9, we see people buy them that want the ability to carry additional people and cargo. I think the new attributes with the CX-90 with the larger size [and] better powertrain is certainly capable. For a target audience, it's vast — from soccer moms to the sporty dad car.

How is Mazda helping dealers prepare for the rollout of battery-electric vehicles and hybrids?

I think they formed a partnership with ChargePoint almost two years ago. Over that two-year period, dealers have been asked to begin to phase that in, and I think they were great in giving us the ability to put it together based on our planning volume — not a one-size-fits-all. Not everybody had to go out and buy phase three chargers; if you felt your market warranted that, you did it. You really got to pick your poison. Just about all the dealers have already executed that.

I know at my store, we have chargers as part of the retail evolution. When we built the new facilities, we certainly did make sure we had the infrastructure put in place.

Are there plans for Level 2 or Level 3 chargers at your stores?

I have the infrastructure there. We put all the underground work [in] — it's all ready to go. It's just a matter of when I have the vehicle need for that level of charging, we can flip the switch immediately.

What are you hearing about the California-only MX-30 EV? Are there lessons dealers can apply to that vehicle in different markets if it's rolled out to other states?

I think that car was specific for California. Obviously, they sold them all. I don't think they had a high production number.

It's that phased approach — that's phase one. California and their regulations, that checked a lot of boxes for Mazda and got our initial foot on the ground and then from there, cascade it out. From my standpoint, as an individual, I'm more excited about the plug-in hybrids with the range extenders. I think that's more suited for the Utah market.

I think we've learned a lot of nuances. There is a market for an electrified car, regardless of range. People still can find a way to make it fit their needs. It's an evolving space. We're not watching it happen because we're on the front lines of it happening. But when you look at the phased rollout of what Mazda's introduced to us at the dealer meeting, I think we're in the right space.

Has Mazda imposed new requirements or sales standards related to selling EVs?

I don't think I'd use the words "impose a sales standard" yet because we don't really have an electric car.

There's a lot of training that's going on that starts obviously with making sure our dealer body has all the infrastructure to support. Just about all of the dealers now have, in one capacity or another, added charging facilities. I think as the cars start to roll out, we'll see a lot more training involved [that is] EV-specific.

Looking back on 2022, how did the market go for you?

For me, we had great growth. We were up 20 percent at both of my stores. From a personal standpoint, we weathered the storm very well.

How close are Mazda's production and inventory levels to coming back in line with demand? And what do you expect in terms of inventory and days' supply in 2023?

At one point, I think we got down to about an eight-day supply. I spent several days at both of my stores last year where I didn't have a car on the ground. We were selling everything as it was coming in. I think, nationally, Mazda's turn level hit almost 70 percent. That number is rebounding now to where I think, nationally, we have about a 25-day supply.

As I look through my pipeline today, it is a far different story than it was at this time last year. We have production, we have cars in-coming. They've done a great job in terms of the allocation process, in terms of trying to distribute to the mass-turning dealers. I'm confident that we're headed in the right direction.

What that means, I don't know, because a lot of it is obviously dictated by the consumer, right?

You didn't have any cars on a lot at one point. How do dealers cope with those inventory constraints?

We've been fortunate that we've had a really strong business. We had a lot of customers that already had a relationship with us that already understood us. It was probably an easier equation than most in terms of setting them up for another car. For the most part, they were willing to wait, because it wasn't like they could go somewhere else.

How does your sales strategy change when you don't have cars on the lot?

I don't think it changed our sales process terribly, with the exception, obviously, demo drives were a little tough. But we worked our way through it using either service loaners, or we have some dealer cars that are around — they may not be the exact car they're buying, but it's the same model and drivetrain. They were just happy to have something to look at, something to feel.

One of the things Mazda did is they really shortened the pipeline. As you know, traditionally, when you order cars from Japan, the lead time is pretty long. They condensed that down. They were allocating cars every two weeks. And those cars usually hit the ground within a 30-day time period, so we were able to really get in front of the customer and, quite frankly, our competitors, and have a car quicker than some of the other guys and have people be able to say, "I want that one." It worked out pretty well. I think we weathered the storm very well.

How is Mazda navigating vehicle affordability concerns right now?

I think with everything right now, inflation is the buzzword of the day. I think one of the biggest strengths that we have is it goes back to some of the groundwork that was done probably five years ago.

Mazda got out of the fleet business for the most part. In doing so, we've done a fantastic job of protecting residual value. I feel like we have a leg up on our competitors, we have something they don't have and that is a really strong resale value and a proven [automotive lease guide] value. I think that's certainly part of the strategy going forward. With the partnership with Mazda Financial Services, they're working hand-in-hand, and it's a complex dynamic right now because of the market conditions.

How are rising interest rates affecting the sale and financing of new or used vehicles for Mazda stores?

Like every store, it certainly has an impact. Consumers are a little more cautious. I think we're seeing much larger commitments in terms of down payments to pay those initial notes down.

Does Mazda have any big plans to promote leasing in 2023?

They've been advocates of leasing for a long time.

They have a portfolio that is very strong. As you know, in this market, customers coming off of a lease typically have pretty good equity out of their car, so it changes that dynamic and minimizes the risk quite a bit. They have, as of recently, gotten more aggressive in lease offers and I look for that to continue.

How are customers responding to the CX-50 so far? Who is the target customer?

It's amazing, because like everybody, we were a little apprehensive when we started off with having that and CX-5 in showrooms side-by-side. But I will tell you, when consumers get a chance to look at both cars, there's some pretty big differences in driver position to visibility; customers really get to make a choice at that point.

It just opened up a whole new avenue to new customers that we probably wouldn't have seen. I think, to date, our fastest-turning units are the Meridian [off-road] editions, which are rugged-looking with all the body cues.

Why do you think Mazda vehicles tend to hold their residual value?

I think we absolutely have some of the best cars in the segments. I think people are discovering them now. The industry experts — J.D. Power and Consumer Reports — they're also discovering that, probably at a higher level.

Some of the actions that Mazda's taking in terms of reducing their fleet exposure helps protect resale value.

And then, quite frankly, when you have cars that people desire to buy, a desire to own, your incentive spend isn't nearly what it maybe once was. It's no longer the deal of the day; we have the right cars in the right segments.