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Thursday, May 30, 2024

Mazda Back on Track

Mazda Motor Corp. was digging itself out of a billion-dollar hole when Russell Wager took over as marketing chief at the Japan-based automaker’s North American headquarters in Irvine.

Things are looking up for the automaker—thanks in part to a rebound here.

Mazda Motor Corp. notched sales of 631,000 vehicles in the fiscal year ended in March, a 3% gain that was good for nearly $12.4 billion in revenue and net income of $337 million.

The profits were the first in five years, and the trend has continued: Mazda reported $245.6 million in net income in the half-year financial report released Oct. 31.

The “good business performance” prompted the automaker to raise fiscal year-end profit projections from $688 million to $980 million.

Irvine-based Mazda North American Operations chipped in with sales of 199,000 vehicles, a 9% jump. The unit took its U.S. market share up to 1.9%, and it drastically reduced its losses, with $25.7 million in red ink, down from $255 million a year earlier.

“Mazda is back,” Wager said. “Eighteen months ago, people were questioning Mazda because globally we weren’t profitable and in the U.S. we weren’t profitable, and they were saying are we going to be the next Suzuki. But because we did not reduce our [research and development] spend in our products, we are now starting to see those coming to fruition.”

Wager, a vice president of marketing, credits promising sales figures to the “great” lineup of vehicles that debuted during his first year on the job. His marketing strategy focused on attracting buyers by promoting features such as the new SkyActiv fuel-saving and performance-oriented technology, instead of offering discounts.

In August, Wagner said, when most automakers were “selling down their old model year ’13s,” Mazda held the “new model celebration.”

It paid off. The company had the best August in 10 years, with sales up 26.4% from the year-ago period to 28,106 vehicles.

“Mazda in the past had been putting a little bit more emphasis on the (price) value, and we just had some great inherent strengths that we weren’t talking about as much,” he said, adding that the company defined its new direction as “alternative to premium.”

“It does not mean we are going to be competing against luxury makes,” Wager said. “What it means is when you look at any of our cars—the new Mazda 3, for example, and the safety features that are on it—you can’t get that on any other car that competes in that segment. … So we are trying to give that value to our consumers while still maintaining the price that they can afford.”

Wager’s team, working alongside Costa Mesa-based Garage Team Mazda, its advertising agency of record, encapsulated the new market approach with its “Game Changer” campaign.

It compares Mazda’s vehicles to the real-life game changers, such as Dick Fosbury, a high jumper who pioneered the back-first way of clearing the bar, and surfer Laird Hamilton, the first to use a Jet Ski to get closer to giant waves away from shore. The TV ad for the 2014 Mazda 3 that debuted last month follows suit, showcasing Martin Cooper, who invented the mobile phone.

“Our whole game changer strategy is talking about somebody that changed something in the world, with [an] invention or something they did, and how it relates to something in our vehicle. So Martin Cooper changed the connectivity in the world by cellphones, and our Mazda Connect system allows people to connect to the outside world.”

Mazda also took an unconventional approach to advertising—the Mazda 6 debut had a “tie-in with the Star Trek movie,” while the Mazda 3 unveiling was hosted live on Microsoft Corp.’s Xbox platform.

“We had over 85 million impressions globally—a lot more than expected—we were optimistic at half that,” Wager said.

The company plans to pursue similar efforts early next year, but only if “it’s organic.”

“We are exploring opportunities I can’t talk about at this point in time, both TV shows, as well as movies,” Wager said. “But I’m not going to do it just to have a car in the background. … We’ve taken some best practices that have worked with our audience, and what we found is if you talk to somebody in an entertaining way and not a sales way … then the brand opinion increases dramatically.”

Mazda spent $217.2 million on advertising last year, according to New York-based Kantar Media.

In the first half of this year the automaker spent $126 million, up from $115 million during the same period last year.

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