For those who couldn't read it:
Wards Auto Logo
New Competitors Expected For Mazda5
By Tom Murphy
WardsAuto.com, Jul 18, 2008 10:54 AM Email a link to this articleEmail a link to this article Printer-friendly version of this articlePrinter-friendly version of this article
WESTLAKE VILLAGE, CA – The Mazda5 cross/utility vehicle, introduced in 2005 and refreshed for ’08, has become a runaway smash hit for Mazda Motor Corp.’s North American unit, but the auto maker has no plans to localize production of the 6-passenger family hauler.
Mazda5 sales surged 44.1% for the year’s first six months to 11,977 units, compared with like-2007, helped along by U.S. buyers downsizing their vehicles in the face of gasoline prices surpassing $4 a gallon.
Mazda5 first-half sales nearly topped CUV’s 2007 total deliveries.
Asked how many Mazda5s the auto maker will sell this year in the U.S., an enthusiastic Jim O’Sullivan, president and CEO of Mazda North American Operations, says, “As many as I can get” from the plant in Hiroshima, Japan.
“We’re not even advertising the car, and I have huge demand for substantially more production of (the) Mazda5, as well as (the) Mazda3, in Canada, the U.S. and Mexico,” O’Sullivan tells Ward’s here during a media preview of the all-new Mazda6 sedan.
This year promises to be a record setter for the Mazda5, as first-half sales nearly topped the model’s 2007 total of 13,718 units, according to Ward’s data. That figure represented a 20% drop from the 2006 total of 17,109 deliveries.
Despite significant volume growth, the 4-cyl. Mazda5 remains a niche vehicle bound to sell in limited numbers. Volumes would have to skyrocket for months before Mazda North America could make a business case to produce locally the Mazda5 or its platform mate, the hot-selling Mazda3 subcompact.
Related Stories
Mazda5 Redefines Truck Category
Mazda5 Sales Soar With ’08 Refresh
“We get tons of efficiency in sourcing both vehicles out of one plant” in Japan, O’Sullivan says. He recalls several years ago, when Mazda management asked the North American team if it would like to sell the tall and spacious Mazda5.
“’You would be creating a segment on your own, because the segment doesn’t exist,’” O’Sullivan remembers management saying. “It still is one of the fastest-growing segments in Europe – it’s a space wagon. We said we think there will be an opportunity because we foresaw back then we were trending more toward the European car market in the U.S.”
O’Sullivan is proud that Mazda is pioneering a clever new sector during a difficult economic period, when Americans are craving affordable functionality.
“Here we have probably the highest fuel-economy vehicle in the U.S. that carries six people,” he says. With its 2.3L I-4, the Mazda5 is rated at 21/27 city/highway mpg (11/8.7 L/100 km). Well-equipped models are available for under $20,000.
O’Sullivan says he expects other Asian brands to join the segment soon. “I guarantee you Honda, Toyota and Nissan will be coming to this market very quickly,” he says.
In Japan, Honda has been selling a comparable 7-passenger multipurpose vehicle, the Stream, for the past two years, but no plans have been confirmed to bring it to the U.S.
Likewise, the similarly proportioned Kia Rondo is finding success in the U.S. Its sales are up 60% so far this year, according to Ward’s data.
The Mazda5 also won a 2008 Ward’s Interior of the Year award for the light-truck category.
On other product fronts, O’Sullivan says Mazda continues studying whether to bring the B-class Mazda2 subcompact to the U.S. market.
And don’t count on Mazda North America to introduce another hybrid-electric vehicle or a diesel in the immediate future, although O’Sullivan says both technologies are “definitely on our radar.” Mazda’s only North American hybrid, the Tribute CUV, is available only in California.
The auto maker has a corporate goal to boost fleet fuel economy by 20% over the next four years.
“It’s a significant improvement for a company that sells a relatively high mix of small vehicles to begin with,” he says. “It’s a matter of weight, powertrain efficiency and rolling resistance, but not sacrificing safety and what ‘zoom-zoom’ represents.”
If Mazda pursues hybrids more aggressively, O’Sullivan says the vehicles must exhibit the kind of sporty driving dynamics Mazda customers have come to expect.
“Just because everyone is going in a certain direction doesn’t necessarily mean we have to go there,” he says. “We’re not a high-volume brand, so we’re not like Toyota (Motor Corp.), selling a significant number of vehicles per year. There’s scale that goes along with that.”
Industry observers also have urged Mazda, with its partial owner Ford Motor Co., to enter the fullsize truck market by offering an M-150, a version of the best-selling Ford F-150 pickup. “But it didn’t fit the brand,” he says.
Even if Mazda eschews the truck market, O’Sullivan sees a bright future for the CX-9 large CUV, as owners of fullsize SUVs seek to downsize. “Fuel issues will remain, but people still need 7-passenger carrying capacity,” he says.
Mazda has 650 dealers in the U.S., with about half selling Mazda vehicles exclusively.
tmurphy@wardsauto.com
