Mazda has struggled with the sales and tough competition in the US, but they are ambitious about their new CX-5. Mazda CEO Masamichi Kogai hopes that this car will stand out in the crowd and that it will boost the sales.
Kogai, together with his team, developed a two-step strategy in order to increase profitability and the first step was implemented back in 2012. Four years ago Mazda launched Skyactiv lightweight platform as well as a range of powertrains which are specially designed to improve fuel-efficient. The beginning of the second step is the presentation of their new 2017 Mazda CX-5 at the LA Auto Show.
Kogai was interviewed last month when he said: “We need two successful jumps up. Now we are going to start our offensive again.” Mazda is not a large car company, but they are ambitious, so hopefully we will see them develop and progress, which is their plan.
The head of the company wants to produce vehicles with high-quality materials and extravagant design in order to move upmarket. Moreover, he wants to boost transaction prices by holding the line on incentives and enhance the customer-retention rate. Here is another part of his statement: “We want to distinguish ourselves by being a little elevated above the other Japanese or mainstream brands.”
In November this year the sales of Mazda vehicles in the US declined 7.2 percent, but despite that they will try to increase prices while the others decrease theirs. Problems they will also address are related to vehicle dependability, customer satisfaction with service and initial quality. According to multiple surveys, the Japanese carmaker was below the industry average.
Read more: 2017 Honda CR-V Vs 2017 Mazda CX-5
Nevertheless, Kogai is monitoring two benchmark brands, and he has a plan. He stated: “They actually repeated the same kind of success twice. We have had only one leap so far, from the [previous] generation of products to the [current] generation that we introduced starting in 2012. We really need to achieve a similarly big leap from the [current] generation to [next] generation.”
We know what we can expect if we take a look at the CX-5. Although Skyactiv 2 drivetrain technology is delivering a 30% boost to fuel efficiency, the new model is not going to have it. However, it will spot new G-Vectoring Control system which improves driving and handling above all.
Mazda representatives hope to sell 400,000 units of CX-5 per year over the vehicles life, which is way too ambitious, considering that last year they sold 370,000 vehicles. The sales in the US leaped by only 0.2 percent in November and 100,246 CX-5s have been sold so far.
CEO talked about the new approach to incentives as they want to represent the brand better instead of selling more cars. He said: “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.”
Kogai also mentioned the US retention rate which is 37%. He added: “It’s not that great. In Japan, the retention rate is more than 50 percent. We want the U.S. rate to catch up.”