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Mazda: Volume shouldn't come first

CEO says the focus should be on the customer experience, rather than topping the sales charts.
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Mazda says that despite being one of the smallest independent automotive brands in the world, the company cannot put volume ambitions as its first priority, with the recently-appointed global CEO admitting that such a goal would create the wrong culture internally.

Speaking to the Australian media at the Los Angeles motor show last week, the president and CEO of Mazda, Akira Marumoto, said that in order for Mazda it survive it needs to be unique and put customer relationships above all else.

“When I assumed the presidency in June I sent out a message to all employees,” Marumoto said.

“Mazda global share is two per cent, it’s a small player, although in Australia it’s much higher, in order to survive as such a smaller player in such tough competition in the future, we really need some really strong point and uniqueness, which makes us stand out as like a shiny brand.”

According to Marumoto, the internal culture of the company is to make decisions quickly and act on changing trends to be able to better respond to customer demands. Furthermore, it has to share a great of platforms and engineering requirements across its many models to reduce cost. Nonetheless, the customer experience is the first priority.

“In Australia we are good at customer experience, the bond and connection between customer and dealer is the most important point. So, vehicles will be sold in various sales channels and modes in the future, however people to people, that relationship is important, we should be a people-oriented business.”

As for volume, Marumoto admits that giving his team a volume goal would set them on the wrong direction.

“Volume shouldn’t come first. What is most important is business quality, sincere handling of customers not the sales front and in terms of management we should reduce incentives and rely on trust for relationship with customers," he said.

“If we prepare enough product line-up and global dealers become like Australian Mazda dealers, then at the end automatically the sales volume will grow. If I give sales volume target to sales and marketing people they regard that as first priority and I don't like it.

Whilst Australian market remains a beacon of success for Mazda globally, there are other elements of the company’s operations that Marumoto would like to seem implemented globally.

“The good points of Australia should be learnt and spread globally and likewise Japan has some good points that should be spread, so the best practises of each country should be spread. Probably because we are a small player, we can do it.

In Australia, Mazda doesn’t follow many other manufacturers by providing huge volume based dealer incentives, allowing the dealers to better sell the vehicles at a profit as stock becomes available rather than pre-registering vehicles to meet targets. Whilst this may see volume drop with a declining market (as we have seen with Mazda sales recently), it also helps maintain better resale for vehicles as most have been bought for similar prices without much downward pressure.

Though many car company CEO’s have stated that volume isn’t their first priority, what do you think of Mazda’s approach to our market?