Mazda: Missed Opportunity with No Mazda 2 for America
July 05, 2007

By Peter Nunn

Soaring gas prices are heating up U.S. demand for compact, fuel-efficient cars. So Mazda must be kicking itself now for not having its new Mazda 2 mini join the party, right?

The cute, crisp all-new Mazda 2 -- launched to great acclaim in Europe and now on sale in Japan as the 1.3- to 1.5-liter Demio -- seems on the face of it the perfect head-on rival for the Nissan Versas, Honda Fits and Toyota Yarises of this world.

It looks good, has great dynamics and is deliciously affordable (prices start at just $9,186 in Tokyo). What’s more, official fuel economy numbers go as high as 54 miles per gallon, putting it up with the top of the class.

But at the launch party for the Mazda 2/Demio in Tokyo today, Mazda officials said the car won’t be heading to the U.S. anytime soon.

“Mazda is still a relatively small company with limited resources,” said Nigel Brackenbury, general manager of Mazda’s Global marketing Division. “It’s also a question of priorities. In North America, our priority right now is with crossovers such as the CX-7 and CX-9."

Mazda has its work cut out for it in that regard. Based on Edmunds.com’s analysis of consumer intent, customer interest in the just-introduced CX-9 and CX-7 surprisingly has waned -- dramatically, in fact. The same study shows the largest increase in consumer interest are in small cars. The analysis examines consumer shopping behavior on the Edmunds.com Web site, indicating what vehicles customers will actually buy in the next couple months.

“Yes, the small-car segment is emerging in North America," said Brackenbury. "But to enter the B-segment demands more engineering time and investment and the margins are lower. As we can’t cover everything, we have to choose which part of the target to shoot at.”

Two other factors may have swayed the "no-to-the-U.S." decision. The Mazda 3, in the class above, is a massive hit and Mazda can hardly build enough of them. So it’s hard to justify adding extra pressure to the production system with the less profitable Mazda 2.

Second, Mazda continues to be in the throes of restructuring its North American dealerships. So it may not be the greatest time to enter a new class with a new compact shipped across the Pacific.

The new Mazda 2 is being built exclusively in Japan and its platform is a joint Mazda-Ford collaboration with Mazda taking the technical lead. From this architecture, Ford will spin off a new successor to its European Fiesta, which is tipped to heading to the U.S. via Brazil, where it is rumored it will be built.

Once that federalized platform is on sale, will Mazda reverse course and bring the Mazda 2 to the U.S.? Answer: it’s possible.

But for now, with the main emphasis on Asian markets (including China) and Europe, Mazda is still some way away from making any decision about the U.S., according to all the feedback at this week’s Tokyo Demio unveiling.

Mazda’s game plan with the Mazda 2/Demio is 130,000-plus units per year, with 60,000 units earmarked for Japan. But that number is set to rise dramatically when the new 2 goes into China.

Listening to all the production and economic arguments, yes, you can understand where Mazda is coming from in not bringing the new 2 to the U.S.

At the same time, it does seem like one glorious lost opportunity.

Posted by Michelle Krebs at 6:24 AM under Commentary , Companies | Comments (6) | digg this | Seed Newsvine