Mazda: no longer a 'niche player.'

Mazda Motor Corp.'s role in Ford Motor Co. Ford 2000 product globalization scheme has yet to be fully defined, but one thing is certain: Its tradition as a developer of specialized vehicles with unique engineering is ending.

"We became a niche player, but that doesn't bring home the bacon anymore," concedes Henry D.G. Wallace, Mazda executive vice president and Ford's lead executive at the troubled Japanese automaker, in which Ford owns a 25% interest. "We need core products and we've got to get back to that."

With sales suffering in both of its primary markets, the U.S. and Japan, Mazda has been wallowing in red ink. It lost 44 billion [yen] in fiscal 1994 and another 30 billion [yen] this fiscal year ended March 31. Mr. Wallace expects a return to breakeven operations in fiscal '96.

Both Ford and Mazda "have been too busy restructuring -- too busy trying to get cost-competitive" -- to integrate Mazda's vehicles more fully with Ford, he says. That may not be realized until after the turn of the century.

Shorter term -- and as a preliminary to further collaboration with Ford on the product side -- Mr. Wallace says some 30% of Mazda's current models must be eliminated. "We've got too many models; we can't effectively merchandise all of them," he tells reporters at the Tokyo Motor Show.

"We can rationalize the models over the next two or three years, but (rationalizing) the platforms will take longer. We see rationalization coming after 2000. Before, both companies wanted to be independent. But now that's changing. We have to change soon if we're going to have platform sharing," a reference to the long lead time it takes to execute on that strategy.

The two companies already share some models, including Ford-engineered pickups in the U.S. and the Mazda 121 (Ford Fiesta) in Europe. They've also formed a joint venture in Thailand and continue numerous other product and component relationships. The 1997 Ford Escort, for example, is based on Mazda Prelude engineering, as is the current model.

Mr. Wallace is philosophical about Mazda's outlook. "When you're below water, everyone paints you three times as bad as You are, and when you're above water they paint you three times as great."