Before the news of FAW Mazda’s disbandment spread, a humble report was ignored by many people. The chairman of Mazda (China) Enterprise Management Co., Ltd. (hereinafter referred to as Mazda (China)) has just changed hands. The new successor Kawamura has served as the vice president of finance of Changan Mazda. One of his responsibilities upon taking office is to reinforce the changes in Mazda’s business in the sales area of the Chinese market.
Compared with the replacement of the chairman of Mazda (China), the industry is more concerned about the news that FAW Mazda will be disbanded. Because if it is true, FAW Mazda can be regarded as the first auto company to “fall down” in China this year.
According to media reports, FAW Group, Mazda, and Changan Automobile are in negotiations, and the three parties plan to merge related businesses under FAW Mazda into Changan Mazda. Dismissing rumors and personnel changes, Mazda (China) dispatched a person in charge with work experience in Changan Mazda at this time, which inevitably made people think about the rumors.
However, how long can Mazda, which has long been known to Chinese consumers as a niche brand, gain a foothold in the Chinese market?
Who abandoned whom?
In fact, the rumors of the dissolution of FAW Mazda began as early as 2019. Earlier, some media reported that FAW Mazda will officially disband in June of this year. This time the news of disbandment came out again, perhaps not far from the truth in broad daylight. It’s just that Mazda, who took a good hand, played such a game, which is unavoidable.
As a smaller brand, Mazda has two joint ventures in China like Toyota and others: FAW Mazda, a joint venture with FAW Group, and Changan Mazda, a joint venture with Changan Automobile Group. The Chinese sides of the two joint ventures are both powerful state-owned large-scale automobile companies. Mazda’s starting point in China was not low, but even with two thighs, it has also played a bad brand in China.
Although there are two joint ventures, FAW Mazda and Changan Mazda are fundamentally different. FAW Group and Mazda have not established a joint venture automobile company integrating production and sales, but only a joint sales company. The new cars sold by FAW Mazda are all manufactured by FAW Bestune, and FAW Mazda is only responsible for sales. Changan Mazda is a joint venture company established by Mazda and Changan Automobile to integrate production and sales.
Mazda has different attitudes towards these two joint ventures with different business scopes, the most direct manifestation is the product launch.
Looking back at FAW Mazda’s new car launch rhythm, the first model Mazda 6 was launched in 2004, but its replacement model was only launched in 2009. The CX-4 was launched in 2016, and no new cars were launched in the next five years. FAW Mazda has been in a state of having fewer models and slow new car launches for a long time. At the golden age of the blowout development of China’s auto market, FAW Mazda is in a dilemma that “skillful women can’t cook without rice”.
Statistics show that Mazda has introduced 6 models in China so far. Among them, FAW Mazda has only 2 models, and Changan Mazda has 4 models. Mazda’s closeness to the two joint ventures is self-evident.
The change occurred in 2017, when Xu Liuping entered the FAW Group as chairman, and the independent sector became the focus of FAW Group’s development. Coincidentally, Mazda broke through 300,000 vehicles in the Chinese market in 2017, setting a record high. But since then, Mazda’s sales in China have continued to decline.
Data show that in 2017, Mazda sold 309,000 vehicles in China, and FAW Mazda sold 124,200 vehicles, accounting for 40.19%. This year is a bright moment for FAW Mazda and Mazda. But by 2020, Mazda’s sales in China have fallen to 217,000, and FAW’s Mazda’s sales have fallen to 77,900, accounting for 35.9% of the total. Since 2018, FAW Mazda’s sales have shrunk at a rate of more than 10% every year.
“Concentrate on strengthening the main business” is Xu Liuping’s first job after joining the FAW Group. In recent years, the sales of Hongqi and Bestune brands have continued to rise. Last year, the annual sales of Hongqi brands exceeded 200,000.
In recent years, FAW Mazda’s sales have declined, and it is unknown how much it has to do with the business transformation of the FAW Group under the leadership of Xu Liuping. But while FAW Mazda’s sales declined, Changan Mazda’s life was not easy. Where will FAW Mazda go? It has become a problem that Mazda has to face squarely. Today, the dissolution of FAW Mazda has more advantages than disadvantages for both the FAW Group and Mazda.
Rebirth is still unknown
Giving up FAW to bet on Changan, it is not easy for Mazda to stand up in China.
Perhaps it is a trick of fate. Like the FAW Group, Zhu Huarong, who succeeded Xu Liuping in charge of Changan Automobile, also regards the autonomous sector as the group’s development focus. Today, Changan Automobile Group has long since escaped the era of relying on joint ventures to deliver profits, and joint ventures have become a drag on Changan Automobile.
Data show that in 2020, the annual sales of Changan Chinese brand vehicles under the Changan Automobile Group reached 1.5036 million, while the total sales of the two joint ventures, Changan Ford and Changan Mazda, were only 500,000. The total sales of the joint ventures were only three of the independent brands. One part. Among them, Changan Ford sold 253,300 vehicles, and Changan Mazda sold 137,300 vehicles. Changan Mazda not only lags far behind Changan Ford, but its size and profit were just a drop in the bucket for Changan Automobile Group.
In the Changan Automobile Group, Changan Mazda is like a “little brother.” Not only that, the annual sales of Changan Mazda has fallen from 184,800 in 2017 to 139,100, a drop of 32.8%. The results of Changan Ford’s reforms in the past two years were obvious to all. Last year, Changan Ford’s sales increased by 37.7% year-on-year, which was much higher than Changan Mazda’s 2.8%, showing signs of taking off again.
Once, when the annual sales of Changan Ford approached one million vehicles (over 820,000 vehicles in 2017), in order to alleviate the production capacity of Ford’s hot-selling models, the “little brother” Changan Mazda often gave way for it. Not only that, but the Group’s internal marketing resources were more inclined to Changan Ford, which had more sales. In recent years, although Changan Ford’s sales have declined severely, in terms of size and brand awareness, Mazda and Ford were not in the same order of magnitude and cannot compete at all.
Today, Ford is stepping up its efforts to resume business in China. Under the general reform, Changan Ford’s sales have rebounded significantly. Especially in the new energy vehicle market, Ford’s first pure electric SUV Mustang Mach-E will soon be mass-produced in Changan Ford. This is not only the key to transformation for Changan Ford, but also to increase sales in China, regain the Chinese market, and increase joint ventures. The best opportunity for the company to speak.
Compared with Ford’s heavy investment in new technologies and new products in the Chinese market, Mazda’s small size has no strength and resources at all. It has been doing research and development and investment in new technologies in the field of the “new four modernizations” of automobiles. This is why Mazda has been so late. Reasons for launching new energy vehicles.
It is worth mentioning that Mazda, known for its “technological paranoia” image, originally hoped to save the decline with the help of Chuangchi Blue Sky, rotary engine and other technologies, but in the end, the dismal sales made its dream shattered. Today, when all car companies are all in new energy, Mazda is facing the problem of how to catch up with the industry trend and stay behind.
Mazda does not understand China
Although Mazda has a noncommittal advantage in engine technology and car design, Mazda obviously does not understand the Chinese market in marketing, and at the same time, it has failed to have a clear understanding of its own brand.
Mazda, with its marketing concept of “Small and Beautiful”, has always hoped that Chinese consumers can understand and recognize its brand value, but it does not understand Chinese consumers and the automobile market. For example, when the Chinese automobile market fell in 2018 as a whole, various brands started a price war to compete for the market. However, Mazda China Chairman Nobuhiko Watanabe said: “Mazda will not participate in the price war. We hope that through value marketing, consumers can understand our cars. The value of the product to ensure our sales.”
Although many auto marketers don’t like to fight price wars, in order to maintain market share, they often cannot help themselves. Even luxury brands such as Audi and BMW are inevitable and have launched new products with lower prices in recent years. And Mazda, which insists on not cutting prices, will eventually result in a decline in sales.
Not participating in the price war can be understood as Mazda has its own dedication. But if you don’t recognize the situation and go against the development trend of the auto industry, Mazda’s strategy is a bit confusing.
China began to develop new energy vehicles as early as 10 years ago. Although many multinational auto brands are on the sidelines, many companies are silently carrying out technical reserves. Since last year, global auto companies have accelerated their official business in the field of new energy vehicles. However, Mazda, which had its 100th-anniversary last year, stated that “in order to concentrate on the development of large-scale vehicle platforms and in-line six-cylinder gasoline/diesel engines, Mazda has decided to enter a stagnation period for product launches. It will no longer launch new models before 2023, only the annual model. And small facelifts.”
Although the small Mazda does not have the strength and financial resources to participate in the competition of the “new four modernizations” of automobiles, it completely ignores the development trend of the industry and still sticks to the technology of fuel vehicles. Such a persistent Mazda wants to be in the Chinese market swept by the new energy tide The difficulty of expanding sales can be imagined. How many Chinese consumers will be moved by Mazda’s obsession and pay for it?
Source: iFeng