For Miata maniacs the world over, it was showtime. At the Geneva International Motor Show on Mar. 1, Mazda Motor Corp. took the wraps off its 2006 Miata MX-5, due out later this year. It's the third generation of a roadster that is the best-selling two-seat convertible sports car in history, with 720,000 sold since the Miata made its debut in 1989.
The new one, like its predecessors, is a bodacious, lightweight, low-slung, sleek, fun car, but with a roomier interior and pronounced fender arches evoking a more muscular look. And, yeah, it still smokes, thanks to a 160 horsepower, 2.0 liter engine. The handling is better, too, what with plenty of ultrastrength steel to improve the structural stiffness in the Miata's unibody design.
The MX-5's job is to revive Miata sales, which dropped 18.8% from 2003 to 2004 while prospective buyers waited for the new model. Competitors in the $20,000-plus range include the Toyota (TM) MR2 Spyder convertible and the Pontiac Solstice, whose debut is scheduled for later this year. "The MX-5 will not lose out to any competitor," vows Takao Kijima, Miata program manager.
You wouldn't have heard that boast four years ago, when Mazda's reputation for bleeding-edge design was fading, and it reported a $1.25 billion loss. Now, the company is in the midst of a global product blitz called Mazda Momentum, launched in November by President and CEO Hisakazu Imaki.
He is orchestrating the launch of 16 new and redesigned models over the next two years, including three high-margin crossover SUVs for the U.S. and a compact for Japan called the Verisa. Imaki is hoping the offerings will drive total global unit sales up 14%, to 1.25 million, and also boost operating profits, which last year were $750 million. Mazda's profits are important to the still shaky turnaround of Ford Motor Co. (F), which owns 33.4% of the carmaker and plans to develop 10 North American models based on the Mazda6 sedan's chassis platforms.
Months before it comes off the assembly line, the new MX-5 is already winning plaudits from auto critics. Two improvements they like: better weight distribution and handling after the engine was moved rearward 5.3 inches, and an optional new 6-speed manual transmission. Analysts say the MX-5, together with the two-year-old RX-8, an award-winning, rotary-powered, four-seat sports coupe, have restored Mazda's reputation for supercool design and engineering excellence. But the two sports cars lack the sales volume -- about 50,000 of each is sold annually -- to have a big impact on overall earnings.
So Mazda needs to juice up sales of other vehicles. In Japan the best-sellers are the franchise Demio subcompact and the Mazda3 sedan and hatchback. In the U.S. the Mazda3 sedan and hatchback top the lineup, followed by the Mazda6 sedan. Mizuho Securities Co. expects overall sales in Japan to rise only slightly for the fiscal year ending in March, to about 300,000.
To push up sales, Mazda on Feb. 7 rolled out its redesigned Premacy minivan, which starts at $16,700 in Japan, and will also be exported to Europe and the U.S. Mazda wants to sell 100,000 of the minivans globally and is counting on it to give a boost to U.S. sales, which are a third of total unit sales. North American sales slumped 4.5% last quarter, and overall operating margins are a modest 3.5%, vs. 8% to 10% at Nissan (NSANY), Toyota, and Honda (HMC). "They aren't making enough money in North America, while Europe and Japan aren't high-margin markets," says ING analyst Kurt Sanger.
How to drive up those profits? Senior Managing Director Stephen Odell says Mazda plans steady cost-cutting, more platform sharing -- and a stream of new cars like the MX-5 that ooze cool and performance.
By Brian Bremner, with Hiroko Tashiro, in Tokyo and Kathleen Kerwin in Geneva