Mazda sees new models powering growth
Reuters / February 24, 2003
HIROSHIMA, Japan - After an 18-month drought of new models at Mazda Motor Corp. that ended just last summer, President Lewis Booth is convinced Japan's fifth-largest automaker is coming back with a bang.
In a promising sign of the "product-led growth" that has also become the motto at domestic rivals Nissan Motor Co. and Mitsubishi Motors Corp., Mazda has shown it can still build cars with the flair to take the industry by storm.
The Mazda6/Atenza, for one, has won more than 30 awards worldwide and has been a huge success all over Europe.
It's the power of attractive new models, Booth said, that will continue to drive Mazda's profits higher in coming years.
"I'm confident we're going to continue to grow the business," the 54-year-old Booth told Reuters in an interview, adding he expected profits this year to come in around levels forecast in November.
The automaker's shares have responded to such a prospect. After falling 5.6 percent in 2002, the stock is up about 15 percent so far this year at 254 yen, outperforming most of its rivals.
The projected net profit of 26.5 billion yen ($223 million) and operating profit of 50 billion yen for the year to March 31, represent double-digit growth from the previous year.
Extending that success will be a challenge, especially as business conditions will become more difficult because of the prospect of a U.S.-led war in Iraq, which Booth conceded would hit the auto industry by hurting consumer sentiment.
The United States already has proven to be a difficult market for Mazda, one-third owned by Ford Motor Co. Even the award-winning Mazda6 has been a tough sell, with sales falling far short of target in its first month in January.
Still, with another strategic model, the RX-8 coupe, due to hit that market in the summer, Booth said he expected "strong growth" in the world's biggest car market.
The RX-8, which Booth called "the most exciting car in the world," has received rave reviews, particularly with a lower-than-expected price tag of about $24,000.
The model comes equipped with a much-hyped next-generation rotary engine which Mazda says symbolizes its revival after a decade of lost growth.
In fact, the small, powerful and low-emission engine was so unique and valuable to Mazda's brand, Booth said, that even selling it to partner Ford was out of the question.
STRONG GROWTH SEEN IN CHINA
China was another area in which Mazda had no immediate plan to cooperate with Ford, Booth said.
Despite announcing a year ago that the two would map out a cooperation plan within a few months, Mazda and Ford have proceeded separately in the world's fastest-growing car market, tying up with different local partners.
"We are always looking for opportunities to expand our business and obviously we've been looking for opportunities to grow together. But we don't have anything for now," Booth said.
And for now, Mazda seems to be doing just fine on its own.
The automaker is due to launch the Mazda6 -- its third model in China -- this April, aiming to grab a 3 percent market share this year by doubling sales to 40,000 units.
The strongest growth, though, will likely continue to take place in Europe.
To push even harder there, Mazda in September became the main sponsor for top-tier Italian soccer team AS Roma, home of national team star Francesco Totti, to raise its profile in Europe's fourth-largest auto market.
Mazda aims to double sales this year in Italy, where Japanese automakers have been virtually non-existent until recently due to high import barriers.
With the product development team solidly on track to churn out strong models, Booth -- Mazda's fourth foreign president in the last seven years -- said he eventually would be looking to find a successor to ensure the company continues to grow.
"I want to leave a legacy where there are people qualified to be my replacement," he said. "I want to see Mazda successful and continue to expand."
My first car was a 67 Mustang Coupe, 2nd one was a 67 Cougar XR-7, 3rd one was a 66 Mustang Coupe. Why did I get rid of these cars for ? I know why, because I'm stupid, stupid, stupid.
My next Ford.....