Irvine-based Mazda North American Operations has fared better than many of its competitors in one of the worst markets for automotive companies in decades.
The U.S. arm of Japan’s Mazda Motor Corp. is fighting the industry slump with weekly strategy meetings, expanded auto loan financing and a revamped advertising campaign.
“We’ve been meeting weekly and paying close attention to what’s happening in the marketplace in order to adapt to new trends if the need calls for it,” said Mike Nakashima, director of advertising at Mazda. “In the last 90 days, we have been paying closer attention to what’s happening and the shifting consumer mindsets.”
Mazda is the “other” Japanese automaker. Its sales are a fraction of those of Toyota Motor Corp. or Honda Motor Co. But it offers Japanese quality on cars that sell for less than many Toyotas or Hondas.
The maker of sporty sedans and sports cars saw a 27% sales decline to 15,420 vehicles in January from a year earlier. That decline was steep, but better than the industry average of 40% lower sales.
For 2008, Mazda saw sales fall 11% to 263,949 cars.
“We have witnessed in the last several months a lot of consumers deferring their planned vehicle purchases until the uncertainty in the marketplace has settled,” Nakashima said. “The last year obviously has been a rollercoaster for us and the industry overall.”
The automaker has been pushing sporty, fuel-efficient cars, which often are appealing to drivers who are looking to cut costs.
“We were far more fortunate than other companies whose portfolios are more weighted to larger sport utility vehicles and light trucks,” Nakashima said.
In October, news broke that Ford Motor Co. was selling part of its 33% share in Mazda as the beleaguered automaker attempted to shore up its finances.
In November, Ford said it had reduced its ownership to 13%.
Many in the industry wondered how the break from Ford would affect Mazda, which has had a nearly 50-year venture with Ford.
Mazda North American Chief Executive Jim O’Sullivan, who up until November had been on Ford’s payroll, said Mazda’s relationship with Ford is as strong as ever.
Others speculate that the split between Mazda and Ford is a good thing for Mazda.
The automaker also broke ties with its primary lender, Ford Motor Credit Co., and hired New York-based Chase Auto Finance Corp., part of JPMorgan Chase & Co., to offer loans and lease financing to Mazda customers.
Chase is financing customers with lower credit scores than Ford Credit ever allowed.
“We’re actually going to be more aggressive,” Nakashima said.
Market Share
Despite falling sales, Mazda increased its market share to 2.3% in January from 2% a year earlier as its sales didn’t fall as fast as other automakers.
“We did see industry sales continue to fall, yet we did gain market share by being able to tap into the current consumer mindset with cars people love to drive,” Nakashima said.
Trying to keep that consumer appeal is driving shifts in Mazda’s advertising, which has been characterized by its “zoom zoom” and “soul of a sports car” commercials.
“We’re not advertising more or less,” Nakashima said. “Instead, we’re making tactical adjustments to our advertising plans overall.”
Last November, the automaker launched Mazdanomics, an advertising campaign showing the value of a Mazda.
The campaign ran from November to January, when Mazda’s near 30% dip in sales wasn’t as steep as the 40% industry average.
“We got very positive feedback from consumers and the dealers,” Nakashima said.
The automaker spent about $290 million on advertising in 2008, according to Nielsen Monitor-Plus, part of the Netherlands’ Nielsen Co.
The automaker is looking to continue advertising while keeping a closer eye on events unfolding in the marketplace after a turbulent 2008.
Mazda recently launched an advertising campaign called The Mazda Driver’s Seat Event this month that is aimed at consumers who are on the fence about buying.
“It’s actually a play off the fact that we really believe that the consumers are in the driver seat as far as the market is concerned,” Nakashima said.
The campaign will offer 0% financing, $1,000 cash back and no monthly payments for 90 days on all new models.
The automaker also is shifting to more digital advertising for its Mazda3 and Mazda6, according to Nakashima.
“A majority of the Mazda shoppers do their homework online and we have been actively working to reach out to them,” he said.
Nakashima said the automaker is “optimistic” that the current industry lull should start to see some improvement by the second half of the year.
