Mazda banking on use of Ford platforms to help ensure profits - Ford Forums

Stacy94PGT · 05-29-2002, 08:37

By MARK RECHTIN
Automotive News

NEW YORK - In a move that will test its ability to create standout products, Mazda Motor Corp. will increase sharply its dependence on Ford Motor Co. platforms and modules to fuel its growth.

Speaking to industry analysts and journalists here last week, Mazda President Mark Fields said 70 percent of the automaker's future vehicles will ride on Ford architecture while only 30 percent will be unique to Mazda.

Among its approximately 15 principal vehicles worldwide, Mazda shares only a pickup - the B series - and a sport-utility - the Tribute - with Ford. In addition, some major components are shared, such as Ford's Duratec engine in the Mazda MPV.

"We need unique vehicles, but we also need vehicles that make financial sense," Fields said. "We need to be focused on making great, distinctive products but also making sure we make money on those products."

Fields, 41, will return to Ford, which owns 33.4 percent of Mazda, on July 1 as head of the Premier Automotive Group. He will be succeeded at Mazda by Lewis Booth, 53, Mazda's senior adviser for corporate strategy and previously president of Asia/Pacific and African operations for Ford.

Fields did not detail which products will be shared. But it is known that Mazda will share the Protege/323 replacement - renamed the Mazda 3 - with the Ford Focus. The Demio replacement for Europe and Japan - renamed Mazda 2 - will borrow heavily from the Ford Fiesta.

Fields has said that cars such as the RX-8 and the Miata are "brand icons" that will remain unique to Mazda.

Although Fields declined to break out Mazda's profitability by vehicle line, he said the redesigned Mazda 6 and Mazda 2 and the current-generation MPV will contribute about half of all operating profit for the upcoming fiscal year.

Mazda reported $214.3 million in consolidated operating profit for the year that ended March 31, a feat Fields proudly noted was done without any new products on the market. With the first wave of new products coming this year, Mazda operating profit will grow 80 percent, Fields projected.

Operating profit is income before interest, taxes, depreciation and amortization and is considered by many to be the best measure of a company's profitability on its core, continuing operations.

Although Mazda insists it has the engineering and product planning prowess to differentiate its vehicles from its Ford siblings, some industry watchers doubt such a feat is possible.

"No company has shown the ability to have differentiation with that amount of common componentry over time, Ford the least of all," said John Morel, an analyst at the Car Lab in Santa Ana, Calif., and a former Mazda product planner.

Mazda is counting on volume growth as well. From 948,000 vehicles sold worldwide in fiscal 2001, Mazda wants to hit 1.23 million vehicles in fiscal 2004. Europe is targeted for a 76 percent volume growth while Japan, North America and the "rest of world" all account for 20 percent increases.

Also, Mazda will look outside Japan as the source for its parts and manufacturing. Mazda is the most Japan-centric of the Japanese automakers.

Fields said Mazda's overseas content averages 17 percent, obviously varying by car line, but he wants that number to reach 25 percent by the end of 2004. The current number includes the U.S.-built Tribute, which is 47 percent North American content.

That means building the Mazda 2 at Ford's plant in Valencia, Spain, as well as increasing production of the Mazda 6 at its Flat Rock, Mich., plant.

Exporting parts procurement is another major part of Fields' decision to slash an additional 20 percent in costs, on top of the 15 percent target already set to be attained by the end of 2004.

Mazda sent a team of purchasing managers and product planners to scout the possibility of sourcing parts not only for Chinese-market Mazdas but also for use in Japan-built cars. However, Chinese assembly of Mazda vehicles would be for that market only, Fields said.