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Mazda CEO Drives Road to Electrification

Mazda says it is prepping to go all electric or hybrid by 2030, and the chief executive for the automaker’s North American division says the seeds are being sown to make that ambitious plan a reality.

The automaker, which has its North American headquarters in Irvine, last week unveiled its 2025 CX-70, a mid-sized SUV which is set to begin sales in spring 2024.

The CX-70 is Mazda’s second electrified vehicle with a plug-in hybrid powertrain. It will also be the first Mazda vehicle to include Amazon’s voice activated AI program Alexa, which is typically used in home devices.

Last year, Mazda introduced the CX-90 model, another SUV and the company’s first step in the plug-in and hybrid sector.

“We have been very pleased with the market reception to the CX-90 and expect the same with CX-70 as well,” Mazda North American Operations CEO and President Tom Donnelly told the Business Journal.

Mazda reports that 2023 was the best year for unit sales in almost 30 years for its North American division. One part of that growth was the CX-90, which sold 30,821 in its initial year.

“It’s been a significant lift in our business since the [CX-90] introduction,” said Donnelly, who took over the top role last April.

The company’s North American operations ended 2023 with full-year unit sales rising 23% to 363,354 vehicles, marking its best year since 1994.

Donnelly noted that several different models grew more than 20% last year, including the CX-50 model, a crossover vehicle that was released over 18 months ago. That growth was the result of long-term strategies developed by the company’s Irvine office for its new products and retail improvements, Donnelly said.

“This is not a one-year blip,” he added.

“It goes back to the execution of the plans that we put in place a number of years ago, and the building block effect it’s had on our business.”

Mazda is Orange County’s fourth-biggest automaker with regional headquarters here, reporting 370 local employees; companywide, it has 336,000 employees.

On the Road

Donnelly took over the president and CEO role from Jeff Guyton last year.

Guyton became chief financial officer for Mazda’s Japan-based parent company, Mazda Motor Corp.

Donnelly joined the car company in 2008 as a director of service and parts operations in Texas before moving up the ranks.

“Not many auto CEOs can say they started in service and parts,” Donnelly said.

His 16 years of experience have offered him multiple perspectives, he said, which now help him execute the plans currently in place at the automaker.

Following the launch of the new CX-70, Mazda will move to make a version of the CX-50 with the plug-in hybrid technology later this year, marking the end of the first phase on Mazda’s road to electrification.

After 2024, Mazda will begin to develop electrified versions for all its models.

By 2030, all Mazda products will be at least partially electrified, and pure-electric vehicles will account for at least 25% of the lineup, according to the company’s current plans.

There will be seven to eight unique electrified models introduced globally as part of this plan.

While upgrading all its vehicles and introducing more plug-ins and hybrids, Mazda will begin to produce its own battery-electric infrastructure and its first battery-electric vehicle between 2025 and 2028.

This will allow Mazda to create multiple battery-electric models based off its own architecture in the years to come.

“Mazda is looking at the industry’s transition to electrification as an ‘intentional follower,’” Donnelly said.

That means the automaker is in no rush to outpace the market.

“We think for right now, plug-in hybrid is the right technology for the marketplace, given some of its challenges of receptivity and overall demand,” Donnelly said.

“We feel well-positioned with the offerings we have right now as we transition towards an electrified future where we have multiple offerings by 2030.”

Retail Redesign

Donnelly said another “building block” to continuing Mazda’s trajectory is a retail initiative from 2014 to redesign its dealerships and facilities to improve the customer experience when purchasing its vehicles.

As of January, 285 locations have been updated to match a new concept designed to encourage customer growth and retention.

Features include an open-concept floor plan, a customer lounge and other amenities built in.

The Mazda dealers that have completed the design transition report a significant increase in customer loyalty and sales with “retail evolution” stores outperforming other locations by an average of 5.7%.

“We’re making a difference in how Mazda is viewed in the marketplace,” Donnelly said.

There are 75-80 “retail evolutions” set for this year. Mazda counts 795 dealers across the United States, Canada, Mexico and Colombia.

“We expect that to provide a significant lift as well,” Donnelly said.

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