By on September 18, 2017

Old Mazda dealer- Burdick Mazda - Image: Mazda“We have been working more closely with our dealers to evolve their businesses and through that process,” Mazda tells Automotive News, “some new dealers have chosen to begin working with us, while others have made the decision to leave the Mazda brand.”

Mazda has been open about its goal of earning 2 percent of the U.S. market while being forthright about the brand’s intentions to do so only on solid ground. This means fewer discounts, a premium vibe, and the kind of higher margins that make dealers happy.

On the dealer side of the equation, Mazda now wants those dealers to improve. In some cases, that means a new location. In others, a new exterior design is necessary. More thoroughly trained staff members is key, as well. But it’ll be slow going. Of Mazda’s roughly 600 dealers, the brand acknowledges that some have forsaken the automaker, though Mazda won’t say how many. Since the efforts to revamp dealers began last year, only 26 have been upgraded so far. By the end of the decade, Mazda believes roughly one-sixth of its network will have undergone a remodel.

In the meantime, Mazda is getting further away from reaching its 2-percent goal.

Mazda sales personnel - Image: MazdaThis isn’t a big surprise to Mazda. Masahiro Moro, Mazda’s North American CEO, thinks it could take a decade to thoroughly overhaul the brand in the United States, though the 2-percent market share tally could be achieved before 2026.

Yet it can’t be encouraging for a brand with market share goals to see market share stagnating one year after the brand’s 2016 market share fell to a 10-year low. With American auto sales falling 3 percent through the first eight months of 2017, Mazda’s share is steady at 1.71 percent, right on par with the 1.71 percent Mazda achieved during the first eight months of 2016.

Mazda, like every other automaker, could sell more vehicles. You can always sell more if you set the price low enough. But according to company spokesperson Yukari Hara, “We are taking on the challenge of prioritizing brand over sales.” Of course, it helps to have the right products to sell. While the Mazda MX-5 Miata, 6, CX-3, and CX-9 earn enthusiast press plaudits for exceptional enthusiast-oriented on-road behavior, seven out of every 10 U.S. Mazda sales come from the compact 3 sedan and CX-5 crossover.Dublin Mazda - Image: MazdaThe Mazda 3 is competing in a shrinking category, one that’s controlled by the Honda Civic and Toyota Corolla. In fact, eight compact cars sell more often than the 3, sales of which are down 19 percent this year in a segment that’s down 5 percent. It will be another two years before Mazda’s compression ignition engines transform the Mazda 3 — theoretically — into a fuel miser.

That means the CX-5, already the company’s best-selling U.S. model by a long shot, will be largely responsible for taking Mazda from 1.7 percent market share to a good 2 percent market share. Mazda executives told Automotive News that production of the CX-5 at the brand’s Hofu, Japan, assembly plant will be increased in order to increase U.S. inventory.

“We are progressing well with our planned shift to crossover models. We will ramp up production considerably in the second half,” Mazda’s Tetsuyo Fujimoto says. The CX-3, CX-5, and CX-9 already account for 55 percent of the brand’s U.S. volume.

[Images: Mazda]

Timothy Cain is a contributing analyst at The Truth About Cars and and the founder and former editor of Follow on Twitter @timcaincars and Instagram.

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36 Comments on “Mazda Plans U.S. Dealer Network Makeover, Still Wants 2-percent Market Share (and More CX-5s)...”

  • avatar

    The biggest volume Mazda dealer in town is solidly in the hood, and seem to finance a similar demographic as the Nissan/Kia/Chrysler operations. Definitely not “premium” feeling as it stands right now.

  • avatar

    If they want to get to > 2% then they will need to bring more CUVs to market. A 5 seat CX-7 with the 2.5T engine should be a great start.

  • avatar

    How long before they go the way of Suzuki in the US?

    • 0 avatar

      Not long, I suspect. I would not buy a Mazda now under any circumstances.

      • 0 avatar

        They will be going nowhere. They offer a full range if cars unlike Suzuki did. They also sell the same cars in good quantities in Canada and Europe, again unlike Suzuki did. People like you have confidently predicted their doom for a decade now. They are profitable and globally volume is up.

        • 0 avatar

          @mike978 – It is interesting that several Mazda vehicles offered globally and profitably outside the US are rebadged Suzukis that appear to fill out the Mazda full range of cars.

          • 0 avatar

            I worked at a Mazda dealership in South America for the last 6 years. This is absolutely untrue. The only non-pure Mazda product is a re-branded Ford Ranger called the BT Pro. Mazda makes vehicles for Toyota. Suzuki definitely does not make them for Mazda.

          • 0 avatar

            Sorry, @Akrontires. Is true – all sold in Asia which is in another part of the world a ways from South America. Mazda Carol(rebadged Suzuki Alto); Mazda Scrum (rebadged Suzuki Carry) truck, van and wagon; Mazda AZ/Flair (rebadged Suzuki Wagon R) wagons; Mazda Flair (rebadged Suzuki Spacia); Mazda Flair Crossover (rebadged Suzuki Hustler). Part of the global full range of profitable Mazda badged products.

      • 0 avatar

        delete comment!

    • 0 avatar

      As long as they’re profitable, they’ll stay in the US market. Still, 2% market share won’t be easy to achieve though.

      Upgrading their dealer network is going to a very long term project. They need to be methodical and start with the dealers in strong local markets and large cities. The upside is that they are fully aware that they are a (very) niche player in the US market so they’re not really shooting for the moon.

  • avatar

    Sadly, the dealer in my town (and the only one within 2.5 hours by car) was closed when the Ford dealer that owned it decided it was a better investment to add more desks for his used car salespeople than to carry Mazda. Then again, it was owned by Betsy DeVos’s family, so I would have driven a couple of hours to buy one, anyway. Though having local warranty service available would have been nice.

    • 0 avatar

      Closest dealer was 45 minutes away in Binghamton NY in the early 2000s when our ’98 MPV was still a pretty new car. But then that closed too, looking at a map it looks like Vestal NY is the nearest dealership now. Seems crazy, as AWD CUVs and compact Japanese sedans have traditionally been strong sellers all over that region.

  • avatar
    SCE to AUX

    From whom can/will Mazda take market share in order to hit 2%?

    Actually, I think there are many candidates.

    • 0 avatar

      I’ll likely soon sell my Volvo V60 and replace it with a diesel CX-5 since I’ve grown tired of the $1.5k or greater maintenance bills for the V60 every time it goes in for so-called routine scheduled maintenance. Possibly, in the near future, they might take my business away from Volvo.

  • avatar

    Our local Mazda showroom is shoehorned in between a semi-derelict VW dealership and a sprawling Dodge dealership. The best part: No direct entrance to the Mazda store from the main highway – you have to enter through the Dodge dealer’s lot and wind around a vast sprawl of new FCA products. Once you arrive at the showroom, guess what? They don’t have any new CX-5’s in stock (just sold the last one they had), but there are plenty of pre-owned vehicles of different makes and models for you to choose!

    I just don’t see how Mazda is going to make it in the US… they can fight VW for the “niche” crowd, I suppose.

  • avatar

    I like many Mazda vehicles and have wanted to lease one on several occasions. But….the local Mazda dealers is always the shoddiest facility and the staff the sleaziest. A dealer upgrade across the board is much needed.

  • avatar

    When I went to go check out the CX-9 a few months ago, the dealer I visited didn’t have one on the showroom floor. So we had to venture out to the lot, in Phoenix in July, to look at one up close. I think it was about 113 degrees that day. By the time the test drive came around I was so sweaty and miserable that I was pretty much done. You’d think they’d have at least one copy of their most expensive product indoors, but no. The place looked like it hadn’t been updated since the mid-90s. Not exactly the experience that’s going to attract buyers.

  • avatar

    2%! Better move those Tributes!

  • avatar

    Here in Raleigh, our Mazda dealership has also seen better days; that building looks like it hasn’t received a renovation since the early 90’s. I think the Raleigh Mitsubishi outlet has better digs…

    I don’t require a car dealership to be the fanciest building on the block or even be distinctive, but some general appearance that you give a *bleep!* might be nice. A generic tall box with big windows, white paint, good lighting, and nice tile floors is perfectly adequate.

    • 0 avatar

      The Durham facility is not great. Having moved to SE PA we have a nice, modern facility and I see quite a few Mazda in the road. So the plan to have better dealers in better locations should, over time, work for them. A lot if people want a dealer fairly close.

  • avatar

    A friend in Raleigh went over to Durham, I believe, instead of dealing with that somewhat grim local dealership in order to test the new CX-9, on my rec, right after testing a Pilot and….bought it right then and there. Mazdas are cars for car people, but non-car people who stumble across them quickly get converted…

    Look, I think Mazda’s long-standing global success (including Canada and Oz) will give them some leeway in the US. It’s about the bottom line, not the top, and they are a nicely profitable company. I think it is great they have a plan! I don’t understand why anyone who likes cars wouldn’t want them to succeed.

    Having said that, the plan is coming not a moment too soon. Here is DFW the dealers are few and all in distant burbs or too dingy to be competitive (or, in a couple of cases, both). Given the weak dealers I’m amazed I see as many new Mazdas as I do, which speaks to the power of the product.

  • avatar

    Here in Jax FL the Mazda dealership has moved into the vacated BMW showroom. BMW got a new showroom across the street Mazda had to spend minimal to update their new digs. I like it alot. They used to share space with VW and now their own showroom, bays and they even have loaners now as they didnt in the past. They have the required WIFI area and quiet spaces as well as a decent but not great lounge area. The staff seem happier as well.

  • avatar

    I’ll help Mazda by buying a new 5 door Mazda6, in red as shown.

    Seriously, I really don’t give a damn about the state of their dealerships. When I bought my Mazda I went once to buy and one more time to pick up the vehicle. Do people really spend time eating the bad coffee and stale donuts as they pay an inflated price to service their vehicles?

  • avatar

    Hey, it’s the old Penn-Can mall in the first picture!

  • avatar

    Mazda is my favorite Japanese auto maker. I have owned many Mazdas from several Miatas to a 3, a 6 and even a tribute. All great cars that never broke down.

    Mazda wants 2% they need more HP and better discounts. That’s the only way in my eyes. If I had to chose one I would want more HP. The Mazda 3 2.5 Touring manual is a sweet value. MSRP is like $23K and change. Awesome value. The Mazda 6 need a premium turbo motor. They have it and it better be in the next 6. 185 HP doesn’t cut it anymore.

    • 0 avatar

      I don’t disagree with the option for more power. They need to use that 2.5T as an option for all their larger vehicles (and a Speed3 would nice too.)

      I don’t foresee better discounts coming from Mazda. They’re such a small company that they can’t afford to eat those costs.

  • avatar

    No-one buys their 2nd choice vehicle, so as long Mazda try to match Toyonda model for model, spec for spec, they will always be the bridesmaid and never the bride. They should chase some niches where no-one else is competing if they want to build market share.

    Some easy ones (they already sell these elsewhere in the world) …

    * 6 wagon
    * CX-4
    * CX-5 with stick shift
    * CX-8

    A bit more effort required …

    * Mazdaspeed 3
    * CX-5 with turbo
    * RX-7/8/9

    • 0 avatar
      Daniel J

      The 6 wagon won’t sell well enough to justify whatever cost to make it USA compliant.

      CX-4 won’t sell either.

      CX-8 might sell, but it might be cheaper for them to just sell the CX-9 without the third row seat and more legroom for the first and second rows.

      One thing I’d love to see Mazda make is a trucklette. Take a CX-9 and convert it into a truck.

  • avatar

    I have two local Mazda dealers within about 20 minutes of me. One is a Ford/Mazda dealer that doesn’t stock a lot of Mazdas and had a 2015 base 5 on their lot forever (2 years is my guess).

    The other one is a VW/Mazda/Audi/Porsche dealer. Weird combination.

  • avatar

    I guess Mazda does know majority of their dealers look like buy hear pay hear lots.

  • avatar
    cimarron typeR

    We have 3 Mazda dealers in KC, to my knowledge, and 2 for sure are within 15min from my house. One is <5min from my house and is a very modern free standing facility.
    I see a ton of new 3,6, CX5(less CX9s) body styles in Johnson County , so there penetration must be fairly high in KC burbs.
    Before we bought our Disco Sport earlier this month I really wanted to test drive the CX9, but my wife vetoed the grille styling.It didn’t offer power folding mirrors,a requirement for our current car/garage ratio.

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