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Does Mazda have enough R&D To Survive?

5K views 16 replies 9 participants last post by  DeepCrystal17 
#1 · (Edited)
This has been a discussion in several threads before. Mazda's R&D can't match those of the larger automakers. With the field changing drastically (think alternative energy sources for example), it's looking like it's going to be an uphill battle for Mazda. Interestingly enough, a Bloomberg News article intertwines Mazda's predicament with Subaru. The two automakers are going after different markets, their business models have similarities. The article suggests some type of synergy between the two, but would even that be enough?

Check out the article here and share your thoughts
 
#2 · (Edited)
Staying lean and making smart decisions

This has been a discussion in several threads before. Mazda's R&D can't match those of the larger automakers. With the field changing drastically (think alternative energy sources for example), it's looking like it's going to be an uphill battle for Mazda. Interestingly enough, a Bloomberg News article intertwines Mazda's predicament with Subaru. Those these two automakers are going after different markets, their business models have similarities. The article suggests some type of synergy between the two, but would even that be enough?

Check out the article here and share your thoughts

I think the key for Mazda is continuing to stay lean and make smart decisions. So much waste occurs in R&D when the business and engineering don't agree. I personally think Mazda will be OK if they continue platforming their products and reinvest appropriately into future products that make sense for their brand. The worst they can do is start chasing Toyota/Honda/Nissan again. That's where you start burning money and resources. Mazda for better or worse has to stick to their corporate identity and find their market. And when you understand your corporate identity, you'll make the right choices as to which area to invest your R&D dollars. Getting into bed with another company like Subaru doesn't make sense. Inevitably one company will consume the other. Subaru and Toyota are pretty tight, so I see a similar issue surfacing to when Mazda was with Ford. Mazda's new direction is defintely a healthier path for them. And through product partnerships with other company (Building a new scion for Toyota for example) they can carve oput a pretty gopod business for themselves. IMO

The otehr path Mazda can go in is partnering with a related but not auto manufacturer. Their partnership with Sumitomo comes to mind.
 
#3 ·
They just need to advertise more.
I can't remember the last time I saw a MAZDA commercial on TV???

I few years a go that "Zoom,Zoom,Zoom" was catchy and it stuck in my head, I went around saying it!!!

They should offer some FREE cheap sunglasses with a test drive or something, send out postcards or something.
Make the people see, and FEEL how good their cars are and they'll buy!
 
#7 ·
I see Mazda commercials all the time. Watch a NFL game.... Mazda is freakin flooding the commercial breaks.

Oh btw... I thought it was cool.... The latest episode of the Grand Tour (Top Gear) had Richard Hammond driving an MX-5 against a alfa romeo and some no name car... the MX-5 cleaned up. was good stuff... Some good publicity there.
 
#4 ·
I believe Mazda is focusing on the wrong target market. The go too much after mom's after being a major "tuning" brand. I know there is nothing wrong about it but that's the reason why there is no so much going on with Mazda. Cars for moms sell better with word of mouth.
 
#5 ·
Mazda cannot survive as a tuning brand. Just not enough volume. The fact they are appealing to a wider demographic is the only way they will survive. And if they make enough money they will offer more for the enthusiasts. Speaking as an enthusiast I really appreciate the balance Mazda is trying to strike. It all depends on what your looking for. A car that is realistically practical AND fun to drive on real roads. Or a car that has a ton of horsepower and is more about bragging rights and specs. IMO
 
#6 ·
Its not a matter of "if" but a matter of "when" mazda will sell itself to a bigger corporation or fold. Car manufacturing is a volume game unless you are into highly profitable exotics. Sergio Marchionne of FIAT-Chrysler was desperate to merge FCA with GM or Ford because he thinks it is very difficult to stay profitable as a volume car maker if you dont sell atleast 4 million vehicles globally.

Subaru is a part of FIJI heavy industries that is into other businesses along with autos just like Hyundai. As the world turns towards total automation and non-hydrocarbon energy source for automobiles, smaller companies like mazda will fall further behind unless they ride on someone else's coat tail.

Mazda has another problem that Subaru does not have to deal with, "brand loyalty". Mazda's time with Ford did plenty of damage to the company's reputation that will be hard to overcome. It will take years if not decades before they can rebuild the reputation as makers of exciting but reliable and economical cars. And this new mazda strategy of trying to be a premium brand is suicidal. Lexus along with the german 3 have established in the luxury market with a brand equity built over decades. Acura and Infiniti have struggled to get into that club despite over 25 years in the market. Mazda trying to price its products to compete with these manufacturers will turn off precisely the people they should be going after , i.e. those who buy Camry,Accord,Sonata,Altima etc. Even though my heart was set on buying a mazda 6, i had to think hard and long to justify paying over 30k+ for a midsized car with 180 odd bhp, while similarly spec'd Accord and Camry with v6 were available for less than that. Even the salesman was honest in telling me that Honda ,Toyota and Nissan have a good dealer holdbacks and rebates than mazda , and hence the competitive price.

Here's something to think about, mazda today has less than 2% market share in the automobile world. Outside North America, they have little presence elsewhere although they are trying to push diesels in europe. Their overall sales in 2016 is less than what they sold in 2015 despite new product launches. They are increasingly embracing Toyota for platform and technology sharing. Mazda makes Yaris iA, and is working on borrowing the Prius hybrid drive train for future mazda vehicles. I think we'll see this relationship go to the next level in future.
 
#8 ·
Mitsubishi only sold about 100,000 cars in the USA in 2016.

If THEY can stay afloat with that dismal number I think MAZDA will be around for a LONG time!!

(although I read Mitsubishi closed their main plant here in the US so it may not be long before they stop selling cars here)

Suzuki folded here about a year or two after closing their main plant here.
 
#9 ·
Mitsu threw in the towel when they executed the Evo. That alone told me Mitsu was finished. It doesn't even feel like they were trying the past few years. Pricing base Lancers at $20k+ and no redesign for 10 years? They pushed the public away if anything. Even the new ones are nothing to be proud of and that was a company that thrived in the tuner community with the Eclipse, VR4, Evo and slowly murdered themselves by killing the VR4, Putting out a bloated Eclipse, and killing off the Evo which, at the time (2008), was destroying the competition. The STI couldn't compare and it was decimating super cars on the track.

I mentioned in another thread that Mazda should attack the family sedan demographic. They offer a great looking vehicle with more bells and whistles than Camry / Corolla and that's what they need to hammer home. They have pretty good reliability, but they don't have a reputation they can ride like Honda. Honda is still riding the coat tails of their 80's and 90's reputation despite being edged out of the consumer report's top spot for a few years now. Not to mention, they're grossly over priced in the Civic line and the Accord line until you hit the V6 trim.

In my area right now, a V6 EX-L is roughly $32,000 before tax, title and tags. A GT Mazda6 is $28,000. That's where they're losing. People are willing to spend an extra $5,000 on a Honda with a V6 rather than the Mazda6 GT vs the Accord with the 4 cylinders. I actually don't see that many Mazda 6 or Mazda 3s around me but the CX line-up is popular. Mazda absolutely needs to focus on the electric market because the Hyundai N line is led by the former M series VP and they're looking to make a splash in 2018. Biermann has been quoted as saying the cars will be mature, affordable and track worthy performance cars. Mazda needs to do something or they'll find themselves in a bad position and making risky moves that they can't afford to go wrong with.
 
#10 ·
Honda killed off its creamy V6 with the introduction of the current generation Accord. Prices vary from dealer to dealer and place to place, but when i bought my 2016 GT, no dealer in metro DC area was willing to go below 30k, and the best deal i could get was 29300+TTL. A top of the line Accord Touring was ~32k range and a EX-L V6 was around ~$27k. Accord was the only car i cross-shopped before buying my Mazda6. It was tempting to get a V6 for less than the price of my 4 banger but my heart was set on mazda and i went with it. Honda and Toyota have good dealer holdbacks and rebates compared to Mazda, and hence the more competitive final buying prices.

Mitsubishi's story is very complicated. Although it was a part of the Mitsubishi conglomerate, it was an independent company for all practical purposes. Auto manufacturing is all about economics of scale, and small manufacturers today find it near impossible survive on their own unless they are into niche products like supercars and hypercars. The last 35 years or so Mitsubishi survived by the largess of the Mitsubishi group and several other auto manufacturers through joint product development or investment. They’ve been in trouble for a long time, and it’s a testament to the quality of Mitsubishi engineers that they were able to produce Evo series with every iteration better than the last. Despite the fact that the 2015 Evo final edition had not seen any new R&D in more than 8 years, it was still a force to be reckoned with. In fact, the latest generation STI looks like it evolved to be like an Evo ! Other Mitsubishi models too have suffered from the lack of funds and have not seen development in over a decade now. Truth be told, there just isn’t enough space for so many car companies in the volume market. Mitsubishi is today partially owned by Nissan-Renault, and the next generation of Mitsubishi models will likely be rebadged Nissans. I do wish Mitsubishi becomes a carrier for Renault cars, I wouldn’t mind a Megane RS or a Clio RS !
 
#11 ·
Killing the J motor for a de-tuned Type R with different innards and turbo bits. So even people who think they're going to just tune the thing for a heavier type R are going to be very upset if they don't do their research.

They will play with the tq curve so peak power is hit early in the RPM band so it should be close to the V6 in terms of 0-60. One thing Honda isn't making very public though, is that the power equivalency only happens when running 93 Oct where as the original J made 300 hp (we all know they had waaaay more than advertised...) made that power on 87.

The new front Fascia looks like a remodeled chrome front end off of a 8th gen civic. It's ugly IMO and lost the aggressive look. The general public won't pay for a premium Accord with the 'better' 4 cylinder and will be underwhelmed by the 190 hp/ 190 tq trying to move the 3,800 pd Sedan. This is Mazda's opportunity to really slide in and steal up those customers from Honda. With the coming Accord dud, and VW emissions scandel Mazda can really suck up some of the market...Just need a more powerful premium engine for enthusiasts and I think that should seal the deal. Don't see too many people buying a $32,000 V6 Camry but the skyactive in the 3 & 6 can be underwhelming to some looking to hop brands.
 
#16 ·
Folks in UK have got 400bhp+ out of last generation Civic Type R with just ECU mod, so i'd be surprised if Accords with the same motor as the new Type R cannot get 300+. The kerb weight of both Accord and Mazda 6 are near identical at ~3250 lbs, so if anything, the Accord even in its base form should benefit from 6 additional hp. While there are many factors that goes into creating a brand equity and i doubt if a more powerful motor in a mazda6 will be the panacea for all its sales ill, it will certainly help move more cars.
 
#12 ·
Globally Mazda sells about 4/5ths as many cars as BMW and 2/3rds as many as Mercedes. Based on Q1 2017 results they could sell 1.5M cars globally this year. Seems healthy enough to have a healthy R&D budget especially if they share powertrains and components to a large degree.
 
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#13 ·
Didn't realize that BMW and Mercedes sell such few cars. That certainly puts things in perspective. If any small car company can survive, it's Mazda - I continue to be impressed with how clever they are in their engineering, despite (or maybe because of) having a small R&D budget. If they're successful in their push upmarket, they can bolster margins and improve their viability.


Unlike other small companies that failed with mediocre products, Mazda's execution on its current product line up is phenomenal - beautifully designed, well built, gorgeous interiors, smart engineering, class leading value. And they seem to have a host of new engine innovations coming in the next 5 years (HCCI in 2019, Hybrid gas-electric in 2020, etc.) Plus they still see a lot of room to innovate in conventional internal combustion engines for the next 50 years.


I'm optimistic about their future barring a cataclysmic collapse in the economy like we had in 2008.
 
#15 ·
Subaru has the backing of FUJI heavy industries and Toyota Motors who own 1/5th of the company, they wont be allowed to fail anytime soon. Besides, there's a global band of Subaru loyalists who refuse to even consider a product without a Subaru badge.

Mercedes and BMW sell high margin luxury cars, Mazda sells economy segment cars where the margins are much lower. Comparing sales numbers between two different companies across segments dont tell the whole story, Ferrari is a very profitable entity ( 18 billion USD in market cap) but sells just around 5000 units/year. As per Sergio Marchionne - FCA's CEO, an auto maker cannot survive in this business without 4 million units/year. This is where Mazda will need a partner or a new parent to survive long term. Toyota may be interested considering they already partner with mazda on Yaris, and own part of Subaru, and mazda is rumored to get a Toyota hybrid unit soon. However, Toyota and Honda have historically stayed away from acquisitions , so who knows !

One curious omission in all this is Suzuki motors. They are in asia/europe kinda how mazda is in states today. They have their share of fans and detractors, and some really good products. Suzuki even after GM dumped them have managed to survive. One reason is their two-wheel and powersports division, and the other reason is India - Suzuki sells over 1.5 m cars in India every year.
 
#17 ·
Agreed BMW and Mercedes are not apples to apples comparisons. Just meant to show that Mazda is not necessarily as tiny as some may think based on Mazda6 sales.

I haven't done much research yet, but Mazda expects net income to be $771 million this year which was hurt by exchange rates. In 2016 they had a net income of $1.1 billion on $28 billion in revenue.
 
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