Mazda ventures into snowy territory – Automotive News

Posted: Tuesday, January 26, 2016

Quest for profits puts focus on awd

DETROIT — The snow-capped Rocky Mountains and the frigid Midwest might seem like harsh terrain for Mazda Motor Corp., associated in the U.S. with zippy-yet-practical cars such as the Mazda3 and the California-bred MX-5 Miata roadster.

Yet the Japanese automaker is launching a market offensive in cities such as Denver, Minneapolis and Chicago, sensing an opportunity to ride a trio of all-wheel-drive crossovers to greater success in the snow belt.

Mazda is selling the virtues of the i-ACTIV awd system in the subcompact CX-3, compact CX-5 and large CX-9, suggesting its “predictive” nature is better-suited than many competitors’ systems to handle ski trips and other snowy adventures.

“The first step is the snow,” Robert Davis, senior vice president for U.S. operations at Mazda, said in an interview at the Detroit auto show. “Once we establish credentials there,” he said, “we can go other places with it.”

In one TV ad now in heavy rotation, a man takes his girlfriend on a drive in a CX-5 and surprises her with an engagement ring atop a snowy mountain.

“A sudden snowfall isn’t going to stop you,” the spot says, “because your Mazda’s all-wheel drive can predict and adapt to changing road conditions.”

The snow-belt gambit reflects the strategy of Masahiro Moro, who took over Jan. 1 as CEO of Mazda’s North American sales arm.

Moro, as global sales and marketing chief, set a goal of deriving half of Mazda’s U.S. sales from trucks by 2018. The low-margin Mazda3 compact car has accounted for about half of Mazda’s sales at times in recent years, hurting Mazda’s potential earnings.

“In the past, we have had a business model with too much reliance on Mazda3,” Moro told Automotive News in September. “With that business model, it is very difficult to make good money.”

Crossovers, for reasons economic and cultural, can command higher prices. A five-door Mazda3 hatchback starts at $19,365 with shipping, but a base-trim CX-3 with the same powertrain and comparable content starts at $20,840. Add an awd configuration, and the sticker price, with shipping, climbs to $22,090.

Davis said 90 percent of CX-3 buyers in the U.S. are opting for awd. Mazda has tried to increase that number for the CX-5, which was lagging expectations with a 50 percent take rate. The new goal is 65 percent, Davis said, and by December, it had climbed to 62 percent.

It might seem as though Mazda is targeting Subaru, which long has used awd to differentiate itself, leading to solid market share in the Northeast and Northwest. Davis said Mazda, which currently does best in the Sun Belt, isn’t going to mimic Subaru’s strategy but rather will stress the performance benefits of awd.

“We’ve got to go our own way,” Davis said. “Subaru has done a phenomenal job the last couple of years, but their brand proposition is quite a bit different from ours. Our brand proposition is focused on driving, and we’re using all-wheel drive to supplement that.”

Hans Greimel and Dave Guilford contributed to this report.

You can reach Gabe Nelson at


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