With German premium brands racing to make their pricing more accessible to the masses, an opportunity exists for Mazda to meet them head-on and establish itself as a genuine, proudly Japanese luxury alternative.
This is an idea espoused this morning by Mazda Corporation’s visiting global director and senior managing executive officer, Yuji Nakemine, who spoke today at the opening of Mazda Australia’s sprawling and glamorous new headquarters.
With core models from European luxury brands now more accessible and popular than ever — think of offerings such as the Audi A3, Mercedes-Benz C-Class or BMW X1 — a new challenge is clearly being presented to slightly upmarket, but still mainstream, car-makers. This is a position Mazda certainly occupies in Australia.
“In this market and Europe, premium brands are coming down in price point, I think maybe it’s a real idea for us, if customers cross-shop between Mazda as a Japanese brand and maybe European premium brands, if we see that trend I see opportunities there clearly. We can upgrade our brand image towards Euro premium,” he said.
However, this is clearly a stretch target, rather than an immediate goal. Furthermore, the plan doesn’t seem to necessarily indicate price increases.
“We shouldn't rush to that, but should continue to improve quality and styling and technology of vehicles so customers will feel very comfortable buying Mazda as an alternative to European premium, if we can do it, [it would be] really fantastic and consistent with Mazda strategy,” Nakemine added.
We would suggest that if you look at what Mazda already does — it focuses its marketing on brand-building rather than pricing promotions, emphasises driving dynamics, puts the emphasis on buyer retention by way of dealer service and designs an upmarket-ish look and feel into its cabins — then you can see the rationale, perhaps.
Mazda in Australia is also the second most popular brand, with 10.7 per cent market share this year. It’s acknowledged by company HQ in Hiroshima as “best practise” and is regarded here differently to many other places.
So we asked Nakemine how the company could balance moving upmarket with maintaining and growing volume. Aren’t ‘premium’ and ‘mainstream’ a little mutually exclusive?
“[We need] good balance between volume and brand image,” he said. “10 per cent market share, is that too much? … We are careful about volume versus brand image, but still 10 per cent is not enough in my mind. I’m sure there are lots of customers looking for that.”
While nobody would say that the notion of what constitutes a ‘premium’ car necessitates a European heritage (not that Mazda would say it wants to go as upmarket as Lexus or Genesis), and while Mazda has a long history with innovation in racing, rotary engines and perhaps even design, some elements count against it.
The fiscally conservative company, which only returned to profit recently, won’t be rolling out higher-performance derivatives (new-generation MPS cars) for the foreseeable, doesn’t play much in the hybrid or electric vehicle space, and isn’t globalising niches such as the sporty crossover, with its new CX-4 to be China-only.
What do you think of the notion of Mazda moving slowly towards being a semi-premium brand?