How Mazda has trebled its sales in South Africa
It’s been nearly five years since Mazda’s divorce from Ford in SA, in which time the Zoom-Zoom brand has trebled its new-vehicle sales, grown its overall market share to 2.6% and improved its resale values.
After a fairly quiet period on the new-product front, Mazda Southern Africa is back in the limelight with the just-launched new seventh-generation Mazda3. Early next year the car will be joined by the CX-30, a compact SUV that will slot in between the CX-3 and CX-5 in Mazda’s local line-up.
At the Mazda3 launch we sat down for a Q&A with Craig Roberts, the former head of sales at Mazda Southern Africa who took the reins as MD in 2017.
DENIS DROPPA: Let’s dive straight into the Mazda3 launch and the most exciting part of it, the Skyactiv-X engine [an innovative new compression-ignition petrol engine that blends the best aspects of petrol and diesel powerplants to make it up to 30% more fuel efficient than a regular petrol engine]. Is SA getting this engine?
CRAIG ROBERTS: I have to disappoint you there; we’re not getting the engine initially as SA fuel doesn’t have the minimum quality required, which is Euro level 4. As soon as we see an improvement in that we’ll be able to launch Skyactiv-X. Unfortunately we don’t see much progress in terms of fuel refineries upgrading their facilities.
DD: How do you foresee the sales split between the Mazda3 hatch and sedan?
CR: At the moment we’ve got about a 75-25 split in favour of the hatch, and this will possibly move to 80% for the hatch with the new Mazda3. As we’ve seen, the market is moving away from sedans and moving over more to hatchbacks, small SUVs and crossovers. But there is still a space for the sedan.
DD: What sales volumes are you expecting from the new Mazda3?
CR: Our top sellers are CX-5 where we average around 400 units a month, followed by the CX-3 with around 330 units. On Mazda3 we’ve been averaging about 220 per month, and we expect to see a retraction to about 160-190 units with the new range, in line with trends for consumers to move to small SUVs and crossovers.
DD: Not to mention that the new Mazda3 is significantly more expensive than its predecessor.
CR: Yes. Our direction is to make the Mazda brand more premium, which may at first sound a little arrogant, but we see the Mazda3 competing more against cars like the Audi A3 and BMW 1 Series. We believe the car can compete in terms of styling, cabin quality, and NVH (noise, vibration, and harshness). The Mazda3 is the pioneer of Mazda’s next-generation product.
DD: It’s been nearly five years since Mazda split from Ford in SA. Tell me about your major achievements.
CR: The main one is reigniting the brand, which has always had a good presence and history in SA. I think we’ve managed to do that on a product-driven strategy, where the product has gone out there and proven itself. We’ve worked really hard to create a value proposition that wasn’t the cheapest in the market but offered the customer real value for money in terms of highly specced vehicles and that lived up to the Mazda legacy of reliability.
A major achievement has been growing volumes from selling 4,939 cars in 2014 to 14,479 in 2018. Last year we grew 9.5%, which was above expectation, especially considering where the market has been.
DD: Tell me about the BT-50 bakkie, which is very well priced and specced and yet its sales have dwindled drastically.
CR: As you may know its replacement is being built in collaboration with the next-generation Isuzu D-Max, and we’ll launch the new BT-50 here in the second quarter of 2021. The current BT-50 is now 12 years old and quite dated even though it’s still a good value proposition. But rather than having it disappear, we’re keeping it on the market to keep it in the minds of customers until the new one arrives.
DD: Are you still standing by your policy not to pursue fleet or rental business?
CR: Absolutely. We’re very emphatic about the strategy we have in terms of targeting the private buyer, the main reason being resale values. We have seen residual values improving in the nearly five years that we’ve been tracking them.
We believe that the primary eroder of resale values are the volumes that go into the rental space.
DD: Tell me more about the lifetime parts warranty you’ve introduced.
CR: In simple terms, any genuine Mazda replacement part has a lifetime warranty for as long as the current owner retains ownership of the vehicle. For example if you have an engine replacement done, those parts carry a lifetime replacement warranty, excluding normal wear and tear items like wipers, brake pads, and clutches.
DD: On that note, what are your views on the Right to Repair campaign?
CR: I think there’s definitely space for it in our market, and there are examples of it that have been deployed successfully in other countries. I think that we need to have it unpacked a little more and get to the point where we as the manufacturers-importers have more confidence in how it’s going to be deployed, and who we’ll be beholden to in terms of service and repairs on vehicles.
I think service and maintenance plans may become optional in future instead of being part of the purchase price as they are now. In theory, a customer should have the option to repair their vehicle wherever they want to, and I approach that from the perspective that if you live 150km from your nearest Mazda dealer you should be able to service your vehicle at a trustworthy repairer. But the challenge is that any consequential damage that is covered under warranty, how do we control that?
We as the manufacturers-importers might go in one of two directions: either reverting to shorter, one-year warranties where the customer can choose to optionally buy an additional warranty or service plan; or alternatively we might go to longer seven-year warranties where we need to be the controlling factor in terms of how a vehicle is maintained.
DD: Staying with controversial matters, what is your policy regarding on-the-road fees charged by dealers?
CR: Our view is that each dealer is responsible for on-the-road costs. We don’t have direct intervention as Mazda Southern Africa.