Does Mazda know something we don’t?
Brand sales in the United States fell over 13% in March—a number which came as a surprise given the number of critically acclaimed models like the CX-9 and 3 in the family lineup.
The United States is the largest market for the Japanese manufacturer. For the year, the biggest drop in the Mazda lineup came from the RX-8 sports coupe, which lost 55% of its sales from last year. Not that this should come as a surprise as coupe models—whether they have four doors or not---always suffer precipitous sales declines after two years on the market.
The biggest trouble, and possibly the biggest surprise, comes in the 20% sales decline of the once hot selling Mazda3 hatchback and sedan. Praised as class leaders among heavy hitters like the Honda Civic and Toyota Corolla, the Mazda3 has been a huge hit with the under-35 sales demographic so coveted by automakers. The theory goes in business circles that if you get them in young, you will have customers for life. It worked for Toyota with all those Corollas it sold in the seventies and eighties. How else can you explain the continued success of the Camry?
The main problem seems to be at Mazda is that it lacks strong entries in mass market growth categories. It may have a hot crossover SUV, but it lacks a sedan or some such model above the Mazda3 into which childless young people would want to upgrade. The current Mazda6 lacks the almost European cool of the Mazda3, and the new model may suffer the same problem.
As with any sales decline, most manufacturers are trying to combat the current lagging market with huge incentives. Problem is, Mazda doesn’t have as large a profit margin to play with on its current models like rival manufacturers Nissan, Honda, and Toyota. These three larger Japanese players can tack on bigger incentives and still not cut too deeply into the corporate bottom line.
However, we wonder what with so many cash rebates, why not just lower the cost of the vehicles themselves? Friends, that is a topic for a whole other blog.
Editors' Note: Mazda USA was kind enough to clarify the Bloomberg story.
Per Jeremy Barnes, Director of Corporate & Product Communications of Mazda North American Operations:
- While its March 2008 sales did show a decrease of 12.8 percent compared to 2007, March 2007 was also the best March in the company’s 30-year history in the US. Also, March 2008 was the best single sales month in the past 12 months for Mazda.
- Both MAZDA3 and MAZDA6 recorded their best month’s sales in the past 12 months
- MAZDA5 recorded its best-ever sales month
- Mazda’s market share was 2.4 percent, up 0.2 percent (a HUGE gain in this industry) over the previous month