New Mazda Business Plan Targets Increased Sales, Profit

Mazda Motor Corp. announces a new 4-year mid-term plan to increase sales and profit during the 2007 through 2010 fiscal years.

Under the new plan, dubbed Mazda Advancement Plan, the auto maker wants to achieve 1.6 million global retail sales by 2010, more than ¥200 billion ($1.7 billion) in operating profit and a 6% return on sales ratio.

The auto maker also calls for a deepening of ties with Ford Motor Co., which owns a third of Mazda.

“Under the Mazda Momentum plan, Mazda succeeded in its efforts to build a solid foundation for consistent and steady future growth,” CEO Hisakazu Imaki says in a statement. “We understand the challenges ahead and are addressing them. The next steps that Mazda needs to take for the future are clear: deepen our synergies with Ford, improve Mazda’s brand value and seek increased business efficiencies.”

In North America, the auto maker wants to improve customer satisfaction, partially by “introducing products that reflect the voice of the customer,” Mazda says. It also calls for an acceleration in its next-generation of dealerships and the improvement of sales productivity at its exclusive dealers.

Additionally, Mazda wants to improve relations with its younger customers (the brand has among the youngest buyers in the U.S.) via marketing initiatives and gain total control of its U.S. and Canadian distributors.

In Japan, Mazda calls for opening new dealerships in the Tokyo metro area and to increase customer satisfaction levels during the entire ownership of a Mazda vehicle.

European goals include the introduction of advanced powertrains, sustaining profitability via new dealerships in major urban areas and beginning sales in certain emerging markets.

A sales goal of 300,000 units annually is set for Mazda’s dealer network in China, while launching the CX-7 and CX-9 cross/utility vehicles in the Association of Southeast Asian Nations region and Australia is planned.

Meanwhile, the auto maker is prioritizing research and development, calling for a 30% increase in R&D investment and a 50% hike in capital investment expenditures vs. levels of the past four years.

On the production side, Mazda wants to increase output at its Hiroshima and Hofu plants in Japan, by 31,000 units and 67,000 units, respectively, in fiscal 2007. This would put total production at 996,000 units annually in Japan.

Mazda also is targeting an improvement in quality and cost competitiveness at its Thailand and U.S. plants, and a smooth launch of its new Nanjing, China, plant, which will be the first to employ the evolved Mazda Manufacturing System.

Mazda reportedly is in talks with the Thai government to expand production at its plant in the country, which makes light trucks for Mazda and Ford.

The auto maker also announced an environmental plan, dubbed “Sustainable Zoom-Zoom,” that calls for a continuing focus on hydrogen fuel cells, including the start of commercial leasing of its Premacy Hydrogen RE Hybrid in 2008 and a new hybrid-electric vehicle to be launched in 2010 that is based on the Hydrogen RE Hybrid.

Mazda says it will introduce its Smart Idling Stop System in Japan and a flex-fuel engine for Northern Europe, both in 2009.

The introduction of a clean diesel engine that meets Japanese and North American emissions regulations is called for by early next decade.

Mazda’s calling card, rotary engines, are not ignored in the environmental plan, with the auto maker set to debut a new generation of gasoline rotary engines with better power and fuel efficiency by early next decade.

Mazda says it will introduce a more fuel-efficient automatic transmission with manual-like performance by early next decade.