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Jul2

Is Mazda’s Premium Push Prudent?

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While Mazda’s vehicles are often praised for being handsome and playing host to desirable driving dynamics, the latter half of that arrangement has become less important in recent years. Remember the last time you saw a Zoom-Zoom ad? Neither do we.

That’s because Mazda isn’t the same brand anymore. While some of its budget-minded performance chops remain intact (MX-5), the prevailing shift has been toward luxury — which is kind of a nebulous concept these days. In the most general sense, it means Mazda is pushing for higher-margin vehicles and fancier showrooms. But it’s not a guaranteed strategy for winning… or losing, for that matter. 

Japanese luxury brands are all sort of middling in the United States. But, globally, they’re way behind their German rivals. BMW, Mercedes-Benz, and Audi are building more models for more customers in more parts of the world and are happy to come up/downmarket to snag another image-conscious buyer. Meanwhile, Lexus, Infiniti, and Acura can’t go all that far downmarket without stepping on the toes of their mainstream counterparts and have sales consolidated primarily in North America. That won’t be as big of problem for Mazda, but it will have to differentiate itself from other the premium brands coming out of Japan while doing the same against European nameplates — and it has fewer resources to work with.

According to Automotive News, expert opinions differ on whether a mainstream brand with a fairly consistent history in the U.S. can reshape itself as an alternative to existing luxury brands. Honestly, we’re also having difficulties forecasting this one. Mazda’s aspirations are clear and its progress is admirable but the path ahead is looks to be littered with moderate dangers.

From Automotive News:

Going upscale is not an easy proposition for an Asian automaker known for value. Mazda argues that as a small brand, it’s better off finding a niche that commands better margins. It’s new Signature trims, for example, are lavishly appointed with nappa leather, genuine wood trim, heated and ventilated seats, alloy wheels and turbocharged engines in most models. A CX-5 Signature compact crossover stickers at $37,935, including shipping. Mazda says the trim has proved popular.

A harder sell, perhaps, is the new-generation Mazda3, a compact car that is the brand’s first ground-up product under its new design philosophy. Despite a price bump, it’s a hit — among car reviewers. The buying public, however, is more interested in crossovers, and Mazda’s new subcompact CX-30 won’t hit showrooms for several more months.

Mazda’s U.S. sales are down 16 percent in the first five months of the year — the sixth-largest decline of all brands — compared with 2.4 percent for the industry. Sales of every Mazda model fell by double-digit percentages. In 2018, Mazda sales rose 3.8 percent.

Even though that looks a little bleak, relentlessly chasing volume has negatively impacted both Nissan and Subaru — albeit for different reasons. Mazda is probably wise to avoid following suit and the brand’s perceived sexiness (thanks, designers) should serve it well on the premium market. “The thing that Mazda has done that’s really smart: They started building their Signature versions,” explained Brian Moody, executive editor of Autotrader. “The best way to do that kind of thing is build cool products first, then craft a message. Don’t do it the other way around, like we’ve seen so many times.”

He believes Mazda’s best strategy would be to attempt to slot itself “just under Acura” as a near-premium brand.

Whatever Mazda does, the plan needs to include taking a long, sober look at the U.S. market to examine where other brands have thrived or failed. With fewer financial resources at its disposal, the company can’t afford a major malfunction during its transitional period. Fortunately, Mazda is aware of all of this, said it knows which side its bread is buttered on, and views the American market as “instrumental” to its overall strategy.

Fine tuning its leasing program also wouldn’t be a terrible idea, as premium-auto shoppers tend to like swapping cars more often than the rest of us.

Most dealers appear to be supportive of the automaker’s long-term goals but some have complained that they’re taking a beating in the interim due to a lack of incentives and product-focused advertising coming from the factory. Upgrading showrooms has also been a sore spot for some but the backlash has been much lighter than what we’ve seen from similar programs — Cadillac’s Project Pinnacle, for example.

At any rate, the majority of Mazda’s lineup still gets a lot of praise and the company hasn’t torpedoed driving enjoyment as it attempts to flesh out its cars with more technology and upgraded materials (for a modest increase in price). Likewise, few are dissing Mazda’s upmarket plan as truly foolhardy. The worst we can say is that its first stabs at the newish “Feel Alive” advertising campaign were abysmal and follow-up spots still leave a lot to be desired. But auto journalists and industry analysts aren’t going to be the ones that dictate if the manufacturer’s strategy works. It’ll be the customers responding to those ads and the new-and-improved dealer experience. We’re deferring to you, the consumer, on this one and wishing the company lots of luck. Because we don’t have the foggiest as to how this will turn out yet.

[Images: Mazda]

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