New model blitz and favourable post-Brexit landscape signal growth, says Jeremy Thomson
Mazda recently launched an updated version of the CX-5 SUV, its best-selling car, and is primed to unveil the CX-60 SUV as the first in a wave of hybrid models.
As the brand embarks on a pivotal era of transformation and electrification, we caught up with UK managing director Jeremy Thomson to hear just how radically its positioning has evolved in recent years and how it could reach even loftier heights in the near future.
What are your priorities for Mazda in the UK?
“Our aspirations are to become a credible alternative to the traditional mainstream premium and that means non-German. We’re not looking to mimic German premium because that’s very well catered for with the existing incumbents and probably impossible to beat them at their own game.
“But we do strongly feel that there is a place for a Japanese premium and that means defining what we mean by Japanese premium and that will take some time to deliver.
“At the moment, of course, Lexus operates in that area and is about a third the size of Mazda in sales terms. We’re trying to find a slightly different space from where they sit today.”
So do Lexus and Mazda share some positioning?
“I’m not sure I could say why not. Lexus has really been the only premium Japanese brand. There is no one else in that space.
“The rest of the Japanese brands operate in mainstream, though obviously all aspire to move towards the right-hand corner of the brand chart over time.
“I think we’ve got some momentum now behind our journey and we have quite a unique approach to powertrains and the overall driving experience.
“The belief that the driver is at the heart of the car is more than just a brand cliché: it really is something that is designed in to Mazda products, going back to the fundamentals of Mazda MX-5.”
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How do you target a mainstream audience with more premium products?
“It starts in quality, styling, technology and the features we offer the driver – many as standard. It’s the overall experience. I wouldn’t point at any one aspect.
“We have a different approach to design to some of our other Japanese manufacturer colleagues in that the ‘car as art’ is important to Mazda, to try to have simplicity and a beautiful product that customers aspire to, rather than clutter. We’ve all perhaps been victims and creators of that in the past.”
Is this approach resonating with buyers?
“The sales stats suggest they are. What is brand? It’s the premium someone’s willing to pay above and beyond the cost of the materials made to make something.
“The reason you’ll pay extra is that you have a desire to own that brand and it’s not always a tangible thing. You’re not buying something physical.
“Last year, the industry was up 1% and we were up 14%, and in private retail the industry was up 6% and we were up 12%. That’s in a crisis year.
“People are still seeking out and wanting to own Mazda products, and as we go in 2022, we anticipate growing our volumes by around 25%, which is way ahead of the expected industry growth, and we’ll be doing that off the back of extraordinary customer demand at the moment.”
How is Mazda evolving its business model in the UK?
“We’ve decided to stick with the traditional dealer relationship, which serves us and our customers very well. Different manufacturers have different reasons for going down the agency route, but we don’t think it’s for us.
“Our dealers in lockdown made great leaps forward in terms of online transactions and similarly we’ve supported them with updates to the way we approach it.
“In recent weeks, we’ve introduced a stock checker and reservation process within our website, so you can reserve a Mazda for a £99 fully refundable fee, which gives you the confidence – in a world of almost no stock – if you identify a car from a local dealer which fits your needs, you can tag it while you continue that journey.
“We still believe it’s going to be mainly omni-channel. We don’t believe there will be much evidence, in the coming years, of a full end-to-end online purchase process.
“We believe the value to the customer is in the interpersonal engagement with well-trained and enthusiastic dealer staff.”
Will Mazda UK be ready to meet the 2030 EV deadline?
“We have one BEV today, the Mazda MX-30. It hasn’t had a full year of sales but in 2021 it was approaching 10% of our total volume. That’s a little behind the overall market at around 11% BEV last year.
“The SMMT forecasts BEVs will still be less than one-fifth of all car sales in 2023. By then, we will be well on the way to launching five HEVs, five PHEVs and three EVs globally, the majority of which I expect to see in the UK.
“We’ve made a full commitment that we’ll be electrified in time for the 2030 and 2035 deadlines in the UK.
“What I think is interesting is the nuance within that, the cadence of it and the appropriateness of it to what people actually want to buy and what they’re capable of having.
“Our multi-platform strategy gives us many more options for people’s quite different approaches to this.
“Will we be ready for these legislative lines in the sand? Absolutely, we’ve got a business to run.
“But it’s not going to be as binary as ‘the internal combustion engine is dead and the electric car is the only way forward today’. We have a much more progressive and nuanced approach to it.”
Do a lot of Mazda customers still tie the brand into the legacy of the MX-5?
“Yes, in a very helpful way to be honest. It provides a very positive anchor to the brand – a kind of focal point – and when you talk to customers about an MX-5, they know what it is so you don’t have to explain the principles of a lightweight, affordable roadster.
“I’m truly hopeful there will be a place for that car line for many, many years to come.”
Is Brexit having an effect on Mazda’s imports?
“Interestingly, now it’s resolved, Brexit has not been a difficulty for Mazda. We were paying tariffs to Europe because 100% of our cars came from Japan. As long as I’ve been at Mazda, we’ve been paying significant import tariffs – so there’s always been a bit of a glass ceiling on what Mazda could achieve in the past.
“Last year, there was a UK-Japan bilateral trade agreement which means we now follow the reduction in tariffs that Europe does, which means the UK tariffs this year are half what they were pre-Brexit, so that’s a positive.
“And in addition to that, all our cars used to come to Europe by boat, then they were shipped to the UK and distributed to dealers, but in the next few months, all production will come to the UK and we will have control of our own local compound for 100% of our supply.
“And then on top of that, you’ve got currency exchange. Since the conclusion of Brexit, the pound-yen has strengthened so the money we return to Japan for any car sold is now quite considerably better than it was in recent years.”
Keyword: Mazda UK boss on taking the brand upmarket