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Mazda’s keys: Store image, product lines

7 min read

Jeff Guyton picked an interesting time to move back to the U.S. from Europe to take over as president of Mazda North American Operations just more than 14 months ago. The brand’s first redesigned model under its new “premium” image — the compact Mazda3 sedan and hatchback — was headed toward a disappointing sales debut after a price hike and a wrong bet that offering all-wheel drive would entice Americans out of their crossovers.

Guyton, 53, who was head of Mazda Europe for a decade, inherited rapidly fading sales in the U.S. But Mazda had a plan: Redesign the dealerships in addition to remaking the vehicles, and hit hard at the crossover space with an upscale entry that would still compete with Toyota and Honda in the base-trim volume segment. Guyton’s job was to execute that plan quickly.

The Japanese automaker kicked off this year with record sales, along with the debut of the CX-30 crossover that essentially is the higher-riding cousin of the Mazda3 hatchback. And Guyton, in consultation with dealers, gave the CX-30 a competitive entry price. He spoke with Staff Reporter Laurence Iliff last month. Here are edited excerpts.

Q: How has Mazda North American Operations changed since you took over?

A: There are three big areas, and some of the things started with me and some things have been rolling out in that time period.

The first and maybe the biggest is our Retail Evolution — our new image dealerships. We have 128 of them operating in the U.S. right now — that’s 60 more than a year ago — and we’re opening between six and eight new stores every month. That’s really changing the appearance and landscape for Mazda all over the U.S. April data shows more than a third of our actual sales are through Retail Evolution stores and about 80 percent are through dealers who have committed to the program.

It’s really changing the face of Mazda in the United States, and we see much better customer satisfaction and loyalty in those stores relative to non-R.E. stores.

The second thing is that when I came in the door, we were launching the new generation of Mazda3. Then late last year, we launched CX-30. Both of those have been extremely well received in the media and by the customers who acquired those cars. And they were both nominated for World Car of the Year.

So from a product standpoint, we have that next generation. During the course of last year, we also had all-time record sales results for CX-5, CX-9 and CX-3. The product portfolio is quite strong and improving.

The third thing is that I’ve brought in a lot of my own philosophy. I’m a very strong believer that culture drives results. We’ve spent a lot of time in the organization thinking about the feelings we want customers or dealers or even the person in the next cubicle to have when they interact with our brand.

How does that help you?

Why do we focus on feelings? This is a lift from Maya Angelou, but people will forget what you say and people will forget what you did, but they always remember how you make them feel. We have four things that we talk about: We want people to feel connected with the brand; we want them to feel appreciated by us; we would like that they are inspired by their connection with Mazda; and that they trust the brand.

What do you see happening in the next year in Mazda’s journey to becoming a premium brand?

The Retail Evolution continues to roll out, and by the end of 2021 there will be nearly 200 stores in operation. So the face of Mazda will have really changed to a much more appealing image.

We are always broadening the range that we offer, especially the powertrain options. Mazda3 launched into a very sharply declining segment, one that’s probably less than half as big as it was five years ago. We got our fair share of that segment, but the segment is a lot smaller now. So we want to continue to expand the range of our lineup so we can capture more and more of those more premium intenders.

How is the CX-30 doing? And what comes next?

The CX-30 is doing quite well and has been very well received by customers. We were steadily building volume on CX-30, but the launch went right into the crisis.

Back in January and February, pre-crisis, we were running at a record level of share in the segments we compete in — best share in those segments in 20 years, and best absolute January and February sales in at least 20 years as well. Then we hit the crisis, and everything turns upside down. Now, coming out, in the first 20 days of May, Mazda sales were about flat, year over year, while the segments where we operate are down 10 to 15 percent. Our share of those segments is growing between eight-tenths of a point and one point, year over year. So we see a very strong rebound, and CX-30 is a piece of that.

Mazda reportedly is developing a rear-wheel-drive car platform and a six-cylinder engine. Wouldn’t crossovers and hybrids make more sense?

I’m not sure those things are mutually exclusive. We can certainly combine those technologies in different segments and with different powertrains — and you’ll certainly see varying degrees of electrification across our portfolios or across our markets to respond to what customers want.

Do you see the coronavirus hanging over Mazda and the industry for years — or a fairly quick return to normal?

Certainly the industry is coming back more slowly in Europe. Even within the United States, a recovery to pre-COVID levels is very different. Is it going to hang around with us? I think that until there’s an effective and widely available vaccine, a whole lot of things are going to be different in daily life, and we will adapt. But people still want to have new cars, or a new used car, and they’ll find touchless ways to get it, safe ways to get it.

The thing I’m concerned about is what happens if there’s another virus peak before a vaccine. We have a huge number of unemployed people in the U.S. and I hope they’re able to get back to work quickly. We don’t know the ramifications of that on the economy for the next six months or eight months.

Is the financial strain on Mazda going to interrupt any of the brand’s plans going forward?

We don’t anticipate big changes in our plans. Certainly some of our tactics will change. It’s dramatically different among our five regions and among the cities we operate in. We see business in the Gulf region, the southern part of the United States, is actually strongly up year over year.

I see big improvements year over year in the Gulf, whereas in the Northeast, which is just coming out from their stay-at-home orders, we’re down. Overall, we’re flat. But it isn’t homogeneous across the U.S. So when I say we haven’t changed our plans, I mean we haven’t changed the big picture. But we’ve got to be much more attuned to what’s happening in each city and with each dealer.

How have dealers weathered the storm? Has there been a consolidation of your dealer body?

The total number of dealers is down. I believe we had 650 or so three years ago, and we have about 560 today. That’s a combination of dealers leaving and new dealers joining. But we don’t intend a reduction of our dealer network size. Let me just put that out there.

As to the bigger question about how dealers have been doing, we have had more or less weekly calls with the group since the beginning of the crisis. They’ve been really generous with their time and their experience. We have jointly worked to address their concerns — to better simplifying programs or deploy an easy-to-use digital sales tool so they can sell cars to people who are at home.

One of the things we’ve done is to put out an attractive finance campaign for certified pre-owned. That isn’t something we’ve done much in the past. But to help with dealers’ inventory position and flow-through, we need to also move used vehicles. And that was a recommendation from our dealer council and we acted quickly on it.

What kind of government stimulus would Mazda like to see?

I think any stimulus needs to be something that’s really simple for customers to understand and dealers to explain. And something that’s good for all parts of the industry — dealers and manufacturers — so the simpler the better.

What are some of the results of the collaboration between Mazda and Toyota?

The collaboration is good for both parties. In financial services, adding Mazda to the Toyota portfolio in the United States is probably one of the biggest volume opportunities Toyota would have to grow its financial services business. On the other hand, the way we have implemented it — with totally unique and dedicated staff to Mazda — means it can function as our true captive bank. The significance is that the captive people come to work every day trying to sell Mazda cars. So, there’s a symbiotic relationship there for the two companies.

Is collaboration possible in making a vehicle together, as you will at the Mazda-Toyota plant under construction in Alabama?

I suppose it’s conceivable, but it’s certainly not for the Alabama plant. Those two vehicles are different. They are not twins separated at birth. They’re different products entirely from different parents.

There is collaboration happening on the electric vehicle architecture. I’m not aware of other vehicle areas, although we do work together in the area of connected vehicles, and we share back-end componentry for data exchange from the vehicles. The front end is unique and developed for each brand.

What do you think?

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