Irvine’s Mazda North American Operations is hoping to become a key player in the growing market for subcompact cars.
The automaker, part of Japan’s Mazda Motor Corp., came out this month with its four-door hatchback, the 2011 Mazda2, and is putting its marketing muscle behind what’s the smallest vehicle in its lineup.
The Mazda2 “is certainly our focus here in 2011,” said Chris Hill, North American vehicle line manager for Mazda.
The car comes at a time when compact car sales are expected to rise with continued interest in fuel efficiency.
“Consumers are looking to the compact market as an alternative to sedans and trucks,” said Jeff Schuster, executive director of global forecasting and product analysis at Westlake Village-based J.D. Power & Associates. “The subcompact car market is likely to continue to increase as consumers shift in priorities.”
Interest in subcompacts is a spillover from 2008, when gasoline prices spiked.
“This segment has long correlated with fuel prices,” Hill said. “When gas prices go up, subcompact sales go up.”
Subcompact sales in the U.S. are projected to double by 2012 to 1 million vehicles annually, according to Mazda.
Sales Rebound
Market watchers expect subcompacts to make up nearly 4% of the 11.2 million to 11.4 million vehicles projected to be sold in 2010.
Growth in subcompacts is seen as part of an auto sales rebound from the depths of the downturn last year, when they reached a low not seen since the 1970s.
In July, Mazda saw a 9% rise in monthly sales from a year earlier with 20,732 vehicles sold. Sales for the seven months through July were up 14% to 136,451 vehicles.
With the help of the Mazda2, the automaker is upbeat about 2010 with sales projected to be on par or better than a projected 10% rise in overall U.S. auto sales.
In the past three years, the subcompact segment has seen a number of entries including the Honda Fit, Kia Soul, Nissan Versa, Toyota Yaris and Scion tC.
“Smaller cars have done very well in the past couple years as automakers retool their lineups,” said Jessica Caldwell, director of pricing and industry analysis at Santa Monica-based industry tracker Edmunds Inc.
The Mazda2 also stands to compete with Ford Motor Co.’s latest version of the Fiesta, which debuted this summer.
The subcompact market is heating up, according to market watchers who see a wave of small cars in the next couple of years.
Next year, General Motors Co. is expected to come out with the Chevrolet subcompact Spark.
Even luxury automakers, such as Germany’s BMW AG, are looking to push subcompacts into the U.S. in the next few years with the BMW 1 series and its Mini Cooper brand.
“Everyone is putting a lot of emphasis on this category,” Edmund’s Caldwell said.
Mazda Offerings
The 2011 Mazda2 is the third version of the car, but is its first foray in the U.S. Two previous generations were sold elsewhere.
The Mazda2 remains one of the top-selling vehicles for Mazda overseas, where small, fuel efficient cars are commonplace.
“These cars are so successful in Europe and Asia because fuel pieces (there) are so high,” Hill said. “We’re probably five to 10 years behind Europe in terms of acceptance of compact cars.”
Mazda2 is part of a broader strategy by the automaker to streamline its lineup, according to Edmund’s Caldwell.
“A lot of automakers, in an effort to cut costs, are looking to globalize their vehicle line up,” she said. “Producing one car for the entire globe is cheaper than creating separate cars for each region.”
Mazda expects most sales to be fueled by Generation Y, or drivers ages 16 to 32.
“We’re targeting younger people who happen to be first time car buyers,” Hill said.
The automaker also is hoping for a spillover from baby boomers who might be looking to downsize from a larger vehicle.
The Mazda2 starts at less than $14,000 and goes up to $17,000.
Mazda declined to say how much it was spending to market the car.
In addition to TV and radio spots, the automaker is looking to connect with young car buyers via music and video games, he said.
