Bloomberg News

Mazda Ties U.S. Expansion Goal to Sporty, ‘Real’ 40 MPG Cars

October 13, 2011

Oct. 14 (Bloomberg) -- Mazda Motor Corp. says it’s making “real-world” fuel-efficiency a core attribute of a brand that mainly touts sporty handling as the Japanese carmaker seeks to lift U.S. volume 74 percent by mid-decade from last year.

Mazda next week begins U.S. sales of revamped Mazda3 compact cars with its Skyactiv engine and transmission that improves fuel mileage by 18 percent, said Robert Davis, senior vice president of U.S. operations. Cars with the powertrain get 40 mpg in highway driving without slowing acceleration, he said.

“It’s not acceptable to us have 40 mpg and sacrifice performance,” Davis said in an interview yesterday. Mazda3 also delivers better fuel efficiency without shedding the spare tire or using a smaller fuel tank to cut weight as rivals have done, he said.

Mazda plans for the new engine, also being added to its CX- 5 compact crossover due next year, and diesel models that arrive by 2013 to speed U.S. growth for the brand that trails Hyundai Motor Co., Kia Motors Corp. and Fuji Heavy Industries Ltd.’s Subaru in volume. U.S. sales for the Hiroshima, Japan-based company totaled 229,566 in 2010 and may exceed 250,000 units this year, based on its pace through September. The company’s target is 400,000 by mid-decade. Mazda peaked in 1986 at about 339,000.

Hyundai’s Fuel-Efficiency

Hyundai promotes its models as among the market’s most fuel-efficient, with the Elantra compact, Accent subcompact and Sonata Hybrid sedan all marketed as achieving 40 mpg in highway driving. Along with eliminating Elantra’s spare tire to cut weight, Hyundai uses “low-rolling resistance” tires that have less grip and create more noise than the standard tires on the new Mazda3, Davis said.

The Elantra’s 40 highway mpg “is one of its best attributes,” Miles Johnson, a Hyundai spokesman, said in an interview. “We’re very pleased with it. We’re selling more 40 mpg models than any other manufacturer.”

Mazda’s “near-term” goal is to lift its market share to about 2.5 percent, from 2 percent currently, Davis said. That should mean annual sales of about 400,000 cars and light trucks, assuming the U.S. market continues to recover over the next few years, Davis said.

Globally, Mazda continues to work with Ford Motor Co., previously its biggest shareholder, mainly through joint-venture plants in the U.S., Thailand and China, he said.

Mazda plans to stop making Mazda6 sedans at a Flat Rock, Michigan plant it shares with Ford. Ford intends to invest $555 million to assemble the Fusion midsize sedan at the plant as part of a tentative labor agreement with the United Auto Workers, the union has said.

To combat the yen’s rising value relative to the dollar, Mazda is building a $500 million plant in Salamanca, Mexico, jointly with Japan’s Sumitomo Corp. that will supply as many as 140,000 small cars a year for sale in North America.

Mazda rose 4.5 percent to 163 yen yesterday in Tokyo. The shares have fallen 30 percent this year. The company’s U.S. unit is based in Irvine, California.

--Editors: Bill Koenig, Jamie Butters

To contact the reporter on this story: Alan Ohnsman in Los Angeles at aohnsman@bloomberg.net

To contact the editor responsible for this story: Jamie Butters at jbutters@bloomberg.net


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