The “Zoom Zoom” tagline may not be as prominent for the Mazda North American Operations brand as it was a decade ago, but it’s a good descriptor for the Irvine automaker’s current business.
Last week, President Jeffrey Guyton added CEO duties to his title, assuming the top spot for the automotive brand’s North American business after clearing 2020 with sales growth—a feat not all could lay claim to given COVID-19, supply chain issues and chip shortages.
That growth has carried over to 2021.
“May was a record-breaking month,” Guyton told the Business Journal.
“We sold an amazing 42,000 cars in the month, and it was up almost 70% year-over-year and was not only a record volume month, but was a record share month for us in the U.S.”
Mazda, with its North American hub based in Irvine, is the country’s 13th-largest vehicle maker by sales. Mazda, Tesla and Volvo were the only major U.S. carmakers to see year-over-year sales increases in 2020.
Sales, Satisfaction Upswing
It’s not a bad starting point to step into the CEO role at the automaker, as it capitalized on an overall upward trajectory for the U.S. auto industry, which saw seasonally adjusted annual rates in March, April and May of 17.8 million, 18.8 million and 17 million vehicles sold, respectively.
More than that, Mazda’s share of the U.S. market more recently ticked up to 2.7%.
Mazda also moved up Consumer Reports’ ranking of the most reliable new cars in 2020, replacing Lexus in the No. 1 spot.
Extra 1%
All of it begs the question of what’s next for Mazda? The CEO, when asked if there’s a target market share figure Mazda is eyeing for the U.S., said he doesn’t view goals in that way.
“We have been historically a 2%-ish kind of player in the United States with very good market shares in each segment where we compete, but if 2% became 3%, that’s 50% more sales, which might be a good stopping off point on the way to a higher number,” Guyton said.
It appears doable, with Mazda’s gain in shares not solely to be attributed to the broader industry surge but, rather, a set of four factors Guyton said will “propel our business for the year.”
Those factors include what Guyton touted as “the best product lineup we’ve ever had.” There’s also more community work being done at the national and local level, with a good example of that being the Enhanced Car Care program, launched last year to offer a complementary oil change and cleaning for essential workers. More than 50,000 had their vehicles—regardless of brand—serviced by Mazda over a six-week period under the ECC.
Mazda Financial Services, done in partnership with Toyota Motor Credit Corp., offered a payment deferral option. Also a factor were big improvements at the dealer level from service to aesthetics in what Mazda calls its Retail Evolution round out the four areas of focus for the business.
“If you look forward to the course of the year, I think we’re going to end up with better market share than we had a year ago, that’s almost for sure,” Guyton said, adding the increase may occur even if the overall industry’s sales momentum cools in the remainder of the year.
Market Opportunities
Mazda’s dealerships—it counts some 620 in the U.S. and Mexico—will remain the biggest touchpoint between the brand and the consumer, which is why in 2017 the company began its revamp at retail.
“Many manufacturers have a so-called image store program,” Guyton said. “We have called the program that we’re on Retail Evolution and it’s much more than an image store program, although there is a beautiful showroom concept. It is also extending into the culture of how we operate in that dealership, and the building itself was inspired by our automotive designers to really showcase the car, but the layout is also designed to shape the interaction between dealer and customer.”
In other words, vehicle transactions aren’t taking place in windowless, cramped offices or cubicles as is the case at many dealerships.
“What we see is a dramatically improved customer experience for both sales and for service and a really changed face of Mazda in the U.S.,” Guyton said of the program.
The CEO pointed out more than half of Mazda’s May U.S. sales were made in one of those new store concepts—a first for the brand.
He added that by 2022, he expects more than 80% of U.S. sales will be made in those newer retail facilities.
Noteworthy to dealers is perhaps the fact that Mazda, in partnership with Toyota, the world’s largest automaker, is in the midst of building its only U.S. plant, in Alabama. The Huntsville plant, reported to cost some $2.3 billion, is expected to employ nearly 4,000 for the assembly of a crossover vehicle due out next year.
Supply Chain Flexibility
Mazda has managed to largely avoid supply chain issues and the chip shortages rankling others in the industry, perhaps due to its smaller size.
“If I look at our recent success, it’s a little bit the intersection of preparation and opportunity, if you will, and so there’s a lot of demand out there for vehicles. In Mazda’s case, I think we have a unique opportunity as a relatively small manufacturer and we’re very flexible in terms of how we produce vehicles and for where,” Guyton said.
He said, by way of example, that while the automaker may run short on a specific chip in one market, that doesn’t stop it from continuing production in other parts of the world.
“We don’t have to stop production where many, many companies have had to stop production because they’re not as flexible as Mazda is,” he said.
Electronification
Come fall, California dealers will be the first to see the rollout of the automaker’s MX-30, a crossover that will be Mazda’s first EV for the U.S.
The vehicle has already been available in Europe and last year sold nearly 10,000 units.
Pricing hasn’t been announced. Industry reports estimate a starting price around $30,000 or higher, with an expectation the CUV would compete with the likes of Hyundai Motor America’s Kona or Kia Motors America’s Niro vehicles.
Other states will see the EV in 2022, with a plug-in hybrid version of the MX-30 also slated for next year.
Over time, Mazda expects all of its U.S. vehicles to have some form of electrification to meet the different vehicle requirements and customer demands moving forward.
As some manufacturers look to test ways to woo customers to their electric offerings, such as Fountain Valley-based Hyundai with a subscription model planned for its Ioniq 5, Mazda will buckle down on making its electrics “as approachable as possible” for those who may be on the fence, with Guyton saying “we need to give people a great drive.”
“The MX-30 is electric, but it’s kind of also ‘electric,’” he added, saying riders are in for a fun drive. “It’s a Mazda first and I spent a week with that vehicle not long ago and the driving dynamics and the feeling of that car is very natural and feels very much like a Mazda that a customer would be used to.”
Laying the Groundwork
Guyton came to the automaker’s U.S. office in 2019 as president after serving as president and CEO of Mazda Motor Europe.
He succeeds former CEO Masahiro Moro, who was tapped for the new position of chief communications officer, a global role based out of Mazda’s Hiroshima, Japan headquarters.
Moro praised Guyton’s role at Mazda last year pointing out he “successfully led Mazda’s business growth in the U.S. throughout the pandemic, making him a natural choice to strengthen our business across the Americas.”
Guyton, under one of the toughest operating environments across industries, helped shepherd Mazda through 2020 as it carved out a 0.2% gain last year from 2019 to sell 279,076 vehicles. That’s despite much of the workforce being remote, with many of its workers continuing to work from home for the time being.
“The lockdown happened March 13 or so. In 2020, our fiscal year ends March 31 and so I was sitting at home thinking ‘Oh, my. We’ve got two weeks to figure out how to close out all our books and do our year-end accounting with everybody sitting at home,’” Guyton recalled.
The company, due to IT upgrades made a couple years prior, managed to button up its books without incident.
From a bigger picture perspective, Guyton said building on the business momentum will come down to further defining the corporate culture and purpose.
Said the CEO: “I think in my capacity, there are only so many things that I can do, but those things are really defining what’s the purpose of the business? What are our goals? And then helping to generate the right kind of culture that we get there.
“I’m a really big believer that culture drives results,” Guyton said.
