Is Mazda's Premium Push Prudent?

Matt Posky
by Matt Posky

While Mazda’s vehicles are often praised for being handsome and playing host to desirable driving dynamics, the latter half of that arrangement has become less important in recent years. Remember the last time you saw a Zoom-Zoom ad? Neither do we.

That’s because Mazda isn’t the same brand anymore. While some of its budget-minded performance chops remain intact (MX-5), the prevailing shift has been toward luxury — which is kind of a nebulous concept these days. In the most general sense, it means Mazda is pushing for higher-margin vehicles and fancier showrooms. But it’s not a guaranteed strategy for winning… or losing, for that matter.

Japanese luxury brands are all sort of middling in the United States. But, globally, they’re way behind their German rivals. BMW, Mercedes-Benz, and Audi are building more models for more customers in more parts of the world and are happy to come up/downmarket to snag another image-conscious buyer. Meanwhile, Lexus, Infiniti, and Acura can’t go all that far downmarket without stepping on the toes of their mainstream counterparts and have sales consolidated primarily in North America. That won’t be as big of problem for Mazda, but it will have to differentiate itself from other the premium brands coming out of Japan while doing the same against European nameplates — and it has fewer resources to work with.

According to Automotive News, expert opinions differ on whether a mainstream brand with a fairly consistent history in the U.S. can reshape itself as an alternative to existing luxury brands. Honestly, we’re also having difficulties forecasting this one. Mazda’s aspirations are clear and its progress is admirable but the path ahead is looks to be littered with moderate dangers.

From Automotive News:

Going upscale is not an easy proposition for an Asian automaker known for value. Mazda argues that as a small brand, it’s better off finding a niche that commands better margins. It’s new Signature trims, for example, are lavishly appointed with nappa leather, genuine wood trim, heated and ventilated seats, alloy wheels and turbocharged engines in most models. A CX-5 Signature compact crossover stickers at $37,935, including shipping. Mazda says the trim has proved popular.

A harder sell, perhaps, is the new-generation Mazda3, a compact car that is the brand’s first ground-up product under its new design philosophy. Despite a price bump, it’s a hit — among car reviewers. The buying public, however, is more interested in crossovers, and Mazda’s new subcompact CX-30 won’t hit showrooms for several more months.

Mazda’s U.S. sales are down 16 percent in the first five months of the year — the sixth-largest decline of all brands — compared with 2.4 percent for the industry. Sales of every Mazda model fell by double-digit percentages. In 2018, Mazda sales rose 3.8 percent.

Even though that looks a little bleak, relentlessly chasing volume has negatively impacted both Nissan and Subaru — albeit for different reasons. Mazda is probably wise to avoid following suit and the brand’s perceived sexiness (thanks, designers) should serve it well on the premium market. “The thing that Mazda has done that’s really smart: They started building their Signature versions,” explained Brian Moody, executive editor of Autotrader. “The best way to do that kind of thing is build cool products first, then craft a message. Don’t do it the other way around, like we’ve seen so many times.”

He believes Mazda’s best strategy would be to attempt to slot itself “just under Acura” as a near-premium brand.

Whatever Mazda does, the plan needs to include taking a long, sober look at the U.S. market to examine where other brands have thrived or failed. With fewer financial resources at its disposal, the company can’t afford a major malfunction during its transitional period. Fortunately, Mazda is aware of all of this, said it knows which side its bread is buttered on, and views the American market as “instrumental” to its overall strategy.

Fine tuning its leasing program also wouldn’t be a terrible idea, as premium-auto shoppers tend to like swapping cars more often than the rest of us.

Most dealers appear to be supportive of the automaker’s long-term goals but some have complained that they’re taking a beating in the interim due to a lack of incentives and product-focused advertising coming from the factory. Upgrading showrooms has also been a sore spot for some but the backlash has been much lighter than what we’ve seen from similar programs — Cadillac’s Project Pinnacle, for example.

At any rate, the majority of Mazda’s lineup still gets a lot of praise and the company hasn’t torpedoed driving enjoyment as it attempts to flesh out its cars with more technology and upgraded materials (for a modest increase in price). Likewise, few are dissing Mazda’s upmarket plan as truly foolhardy. The worst we can say is that its first stabs at the newish “Feel Alive” advertising campaign were abysmal and follow-up spots still leave a lot to be desired. But auto journalists and industry analysts aren’t going to be the ones that dictate if the manufacturer’s strategy works. It’ll be the customers responding to those ads and the new-and-improved dealer experience. We’re deferring to you, the consumer, on this one and wishing the company lots of luck. Because we don’t have the foggiest as to how this will turn out yet.

[Images: Mazda]

Matt Posky
Matt Posky

A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.

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  • Kyree Kyree on Jul 02, 2019

    Mazda needs to take a good look at Volkswagen, whose premium, luxury, and near-luxury cars we don't get anymore. They were all inappropriate for our market and cost too much money. The B7 Passat (which by the way, was not on the B platform)? Very nice, but compromised, expensive, and unreliable. Cue the NMS Passat in 2012, which was larger, but not nearly as nice. Moreover, the all-new 2020 Passat is a re-skin of the outgoing model, with some glaringly-outdated hard points, like the instrument cluster and handbrake. The Touareg? Nice, but a Grand Cherokee matches it for the same or less money, with better AWD systems to boot. Besides, what VW really needed was a three-row SUV. So now we have the Atlas, a competent offering that nevertheless does little more than tick off a bunch of "Made for America" checkboxes, with none of the styling panache of its European-designed counterparts. The old Tiguan? A veritable sport hatch on stilts, but expensive, cramped and a gas hog. So now we get the long-wheelbase version of the new model...replete with a single boring engine that's a bit more efficient (and still worse than its competitors in that regard), but not nearly as fun. The Jetta has been similarly distilled down to What Will Sell, with the exception of the spendy GLI. And I've heard rumors we just aren't going to get the regular Golf for the Mk.8 version. It'll either be the GTI or the Golf R. The SportWagen is also going bye-bye. Hopefully, the next current American Golf R, like the outgoing one, will be imported from Europe, with European levels of content. The less said about the Phaeton, the better. The only premium car that Volkswagen really sells is the new Arteon, which will almost certainly be a flop when a Charger R/T or Stinger GT can be had for similar prices (or even a lightly-equipped A5 Sportback or 4 Series Gran Coupe).

    • Gtem Gtem on Jul 02, 2019

      I'll offer the counter-point that Mazda desperately needs SOMETHING to differentiate themselves from Honda/Toyota etc in their offerings, they tried overtly sporty dynamics (at the expense of NVH) and Americans certainly did not really appreciate that. They're now trying the "posher interiors and driving experience" and I think this has more legs. I see CX5s EVERYWHERE (including a ton of dumping into fleets, granted). i feel like I've noticed an uptick of newer Mazda6s as well, in high end trim, where I never used to see the original '14 car around much at all. Of course this is all highly anecdotal.

  • Autoguy Autoguy on Sep 26, 2019

    I think Mazda has no choice but to try to find a niche market, but for some reason it refuses or is slow to add premium features that its competition offers The 2019 Mazda 3 is good example, the highest premium trim has a lot of good features like heated seats, huds, leather seats, but no ventilated seats, rear a/c vents, dual clutch transmissions, turbo engine,panoramic sunroof (and of course while the CX-5 Signature has almost all of these it does not have a panoramic sunroof and like almost all mazdas is usually near the bottom for interior and cargo room (rear seats are usually too cramped). I find it strange that Mazda leadership seems to think adding more power (ie. Mazdaspeed is childish (premium buyers like myself expect more power) For a premium vehicle the Mazda 3 is underpowered. For all of its merits, its hard sell (for Mazda) when you can buy a 2020 Kia Forte Gt which has a 201 hp turbo a 7 speed dual clutch transmission, heated and ventilated seats, and a multilink rear suspension for thousands less than the 3 which does not have any of these desirable features. I own 3 mazdas and although I would like to buy another one it seems Mazda will be to slow to address the foregoing deficiencies in there products. Mazda has loss its way as in its push for luxury the cars are not as fun to drive anymore. It really saddens me that Mazda top leadership calls the mazdaspeed childish as he obviously doesn't understand that premium also equates to performance (ie. lots of power and great handling). If you want to sell more cars you do need to have more performance trims of your mainstream cars (that is what get customers into the showrooms) Kia/Hyundai smartly recognizes this and have GT, N lines, Ford has STs, and they have halo cars like the Ford GT, sporty cars like Mustangs, Corvettes, Supras, Subaru has WRXs, Honda has the civic SI, and R, Kia has the Stinger. Mazda has absolutely nothing to compete with the foregoing. The Mx-5 is fun but it really is too small (many of us cannot comfortably fit in it (I am only 6 feet tall and I find the headroom insufficient for me) and it really could a more powerful engine option)and come on no glovebox?

  • ToolGuy Honda is dreaming. And resting on its 'laurels' (French for 'posterior').
  • SCE to AUX Here's some advice - slow down. That's a great way to arrive home safely, without a ticket, with lower blood pressure, and more economically.
  • Dartdude They need to rebrand the models, The standard model should be Wagoneer and long version should be Grand Wagoneer. There should offer the Ram Rev powertrain in these
  • Irvingklaws Seems more like they're adopting Honda styling queues. Now if they would just adopt their reliability...
  • FreedMike "Obsidian Edition."Oooooh, obsidian is really, really hard stuff.
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