Mazda Ready to Cross Over

 2006 Mazda Miata by TCC Team (6/26/2005)
Raising the benchmark, one sunny day at a time.

Industry Report: May 30, 2005 by TCC Team (5/30/2005)
Mazda dubs crossover CX-7, Ford and GM dropping again in May.

Think of it as the heart and soul of Mazda. Since its launch, in 1989, the little Mazda Miata has played a big part in the revival of the long-struggling Japanese brand.

But even as Mazda gets ready to launch an all-new version of the little roadster, it is looking for new ways to punch some more zoom-zoom into its image.

Mazda’s first-ever crossover vehicle is on its way, and the Ford affiliate is actively looking for even more market segments to enter, according to Jim O’Sullivan, president of Mazda’s U.S. sales subsidiary.

The challenge, Sullivan stresses, is that in whatever segment Mazda enters, it must “bring something different.” Despite the backing of Ford, the Asian maker can’t go head-to-head with the likes of Japanese giants Toyota, Honda, or Nissan.

Flooding the market

Mazda learned that the hard way, O’Sullivan recalls, when it unleashed a torrent of product in the early 1990s, such as the compact MX3 and high-line 929. It didn’t have the resources to support all the new models, especially on the marketing side, and nearly sank under their weight. Massive losses threatened the company’s very survival, forcing Ford to buy up a larger, controlling share.

In the years since, Mazda has focused on developing a unique niche, marketing to enthusiasts, a small but loyal segment of the broader automotive market. The added advantage, shows a recent study by Forrester Research, is that these “alpha car buyers” tend to talk about the products they like. That has added credibility to Mazda’s zoom-zoom ad theme.

“We lost our way in the early ’90s,” says O’Sullivan, “and we’re not going to do that again. We’re not going to try to be all things to all people.”

But there’s no question Mazda would like to appeal more people with more product than core models like the Miata and Mazda6. After more than a decade of struggling, the Japanese maker believes that it now can move from the industry basement to become a credible, if still a niche player. Currently, its products compete in segments that account for just 48 percent of overall U.S. sales. Within a few years, that could be significantly larger.

The compact Mazda3 suggests that the maker can expand its appeal. The little car’s volume has topped 10,000 in recent months, outselling competitors such as the Nissan Sentra. And the numbers are limited solely by supply, O’Sullivan insists.

Mazda hasn’t done as well in the sport-utility segment, despite assistance from Ford. So it’s shifting directions a bit, targeting the fast-growing crossover niche, which is now outpacing the SUV segment. The CX-7, a version of a car-based concept vehicle, will hit market early in 2006.

What else is in store, Mazda officials will only obliquely hint at. “It’s about creating cars for people who like cars,” says chief designer Maury Callum. “It’s what enthusiasts want.”

Taking risks

It’s also what Mazda wants.

The growth strategy is risky, and O’Sullivan promises Mazda won’t “make a big jump into segments where people don’t expect us.” That means no big pickups or full-size vans. And the automaker isn’t likely to target the luxury segment any time soon, either.

Mazda’s recent success has definitely drawn some attention, and not just from potential customers. O’Sullivan admits his company is now “on the radar screen” of competitors ranging from Toyota to Pontiac. Indeed, the General Motors subsidiary is planning a direct assault on the Miata with its new Solstice roadster.

O’Sullivan doesn’t seem particularly worried about the Solstice. The direct comparisons only emphasize the Miata’s position as the benchmark, he contends. And “more noise” helps draw more people into the segment, he adds.

But Mazda isn’t likely to have as easy a time carving out a niche of its own going forward. The Japanese maker is becoming a visible target, and even as it looks for new opportunities, the competition will also be looking to pick it off.

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