Wallflower Mazda, Ready To Tango?
For some weeks, we have been following the steamy nampa between Japanese and European auto makers with more than prurient interest. First Mitsubishi and PSA (TBD), then Suzuki and VW (marriage consummated.) Now what? Now who? Suddenly, all eyes are on Mazda, the former wallflower of Nipponese car makers.
Bloomberg says that “Mazda Motor Corp. may be the next Japanese carmaker to strike an alliance following plans by Suzuki Motor Corp. and Mitsubishi Motors Corp. to team up with overseas manufacturers.”
Why the sudden urge to get married? We are in one of the worst times for cars ever (except for China.) At the same time, you have to invest now in new technology and new models, else you will be left behind in the next upswing. The car business is the highest stake poker game imaginable. It still takes around 5 years to develop a completely new car. A little less if you have lots of money. A lot longer if you are short of cash. You have to place your bets now, and hope that in 5 years, you will have a solid hand.
On top of it come huge investments into hybrid, electric and other next- generation technology. There is no immediate payback, and future payback is unsure. Hybrids and electric cars amount to less than 2 percent of the global car market. By 2020, battery-powered vehicles will make up 10 percent of the market, Nissan Motor Co. Chief Executive Officer Carlos Ghosn estimated. It’s a long way to 2020.
Smaller players have an especially rough time. “Carmakers like Mazda with annual sales of about only a million units need to be exploring partnerships to survive,” said Yoshiaki Kawano, an analyst in Tokyo at auto consulting company CSM Worldwide.
Ford has reduced its stake in Mazda to 11 percent from 33 percent last year. It looks like Ford wants to get totally out of Mazda. So who will be the lucky groom?
Bloomberg thinks it will be Toyota. Our own Cammy Corrigan disagrees. Mazda may be buying hybrid technology from Toyota, but Toyota would not be interested in buying Mazda. As Ms. Corrigan said:” Who do you think they are? Volkswagen?”
Toyota remains tightlipped. “Even if there were talks of any alliance, I wouldn’t be able to speak about it,” said Toyota Executive Vice President Takeshi Uchiyamada a few days ago.
So if not Toyota, who else will take Mazda down the aisle? Place your bets, B&B. The lucky winner will be crowned TTAC Soothsayer Extraordinaire.
Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.
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