Adaptability, Production Needed Thrive in Mexican Market

Q: How have Mazda Mexico’s sales evolved in recent years, and what have been the main factors behind the brand's success?

A: In 2019, Mazda Corporation asked us to implement a growth strategy focused on increasing market share in Mexico, boosting sales and production volumes. Mazda has a manufacturing plant in Salamanca, Guanajuato, and the goal was to increase production, both for exports and domestic sales. The pandemic forced us to reconfigure some aspects of this strategy, but we remained convinced that we needed to move forward. In 2022, we implemented the strategy. 

Part of the products we produce in Salamanca saw a price reduction, such as the Mazda 3 sedan and hatchback. This was possible because by increasing production volume, manufacturing costs decreased, allowing us to lower selling prices. As a result, sales increased: from 500 units per month to 2,000.

We later integrated other products and expanded our dealer network, despite the pandemic. This strategy allowed us to sell 48,000 units in 2022. In 2023, with the strategy in full swing, we sold 76,000 units. In 2024, we aim to approach 100,000 units sold. 

Q: How has Mazda Mexico's five-year strategy been adapted to respond to changing consumer preferences?

A: Our strategy has evolved to adapt to the changing dynamics of the market. We closely observe technological trends, such as electrification. Three years ago, we incorporated advanced technologies into models like the Mazda2, Mazda3, and Mazda CX-30 versions, which are a step toward hybridization.

We also launched new versions and products, such as Mazda CX-70 and Mazda CX-90. These new models include hybrid technology with a new propulsion system, engine, and transmission. They are turbocharged and have low emissions. We also introduced Mazda CX-50 to cater to market segments where we previously had no presence.

In January 2025, we will launch the Mazda BT-50, a pickup truck that will enter a large segment of the Mexican market where we have not had a presence until now. All of this has been part of our five-year plan, which has been continuously adapted to market preferences and demands.

Q: What are Mazda’s unique differentiators and how do its vehicles stand out in the Mexican market?

A: Mazda's unique aspects can be summarized into four major categories: brand, product, people, and business partners. Mazda is a powerful brand with a solid philosophy, values, principles, and a clear promise. It is a brand with a strong and well-defined purpose. Mazda's product stands out for its unique and recognizable designs and exceptional driving experience. The relationship between weight, power, transmission, steering, and braking makes our vehicles very enjoyable to drive. 

The people who work at Mazda, from the manufacturing plant and corporate offices to the dealerships, make up an exceptional team. We are a workforce of 10,000 people dedicated to offering high-quality products and services. Our business partners are also fundamental. Without them, we could not operate successfully. From the transporters who deliver vehicles to the dealerships, all play a key role in our value chain. 

Q: What are Mazda's expansion plans and how will the five-year plan continue?

A: Our expansion plan extends until 2030, both for Mazda Motor Corporation and Mazda México. Mazda is increasingly investing in electrification and in reducing our carbon footprint. One of our goals is to achieve near-zero emissions at all our plants. We are also working to offer different technologies, such as hybrids, plug-in hybrids, and improved combustion engines, both gasoline and diesel. The company's strategy is adapted to the needs and regulations of each market, as conditions in the European Union, the United States, Mexico, and China are different.

In Mexico, although we have not yet launched EVs due to the lack of infrastructure and clear benefits for consumers, we are adopting other technologies, such as hybrids and plug-in hybrids. The charging infrastructure in Mexico is still inadequate, and finding a charging station is a challenge. The lack of a reliable network could be an obstacle to the mass adoption of EVs.

Our plan for Mexico focuses on sustained sales growth and the development of our dealership network. Our goal is to have 85 dealers by the end of this year, up from the 74 we now have. 

Q: What are Mazda's strategies for reducing emissions, both at the corporate level and in its plants? 

A: Mazda has a comprehensive approach to reducing carbon emissions, which goes beyond simply introducing EVs to the market. Our Well to Wheel strategy considers the entire life cycle of a vehicle, from its conception to the end of its usefulness. The goal is to reduce pollutant emissions at every stage of the process. For example, the extraction of raw materials also generates pollution. We are exploring ways to minimize our environmental impact during this stage. Regarding logistics, we are pushing for shipping companies and transporters to reduce their carbon footprint. We are implementing technologies such as solar panels at our plants to reduce dependence on non-renewable energy sources. We are also focusing on using sustainable materials. 

One major concern in the industry is the disposal of used batteries, as there is no clear global strategy for managing them at the end of their life cycle. Mazda is considering all these aspects to reduce emissions throughout the supply chain, from the start of the vehicle's life cycle to its final disposal.

Q: What are the main challenges Mazda faces, especially considering the shift toward green energy?

A: The challenges are many because reducing emissions adds an extra layer of complexity to the industry. The pandemic showed us how fragile the supply chain can be. Even years later, we continue to face supply issues. 

Semiconductor supply is another problem. Before the crisis, no one considered the need to develop alternative materials or decentralize production. Now, supply chains are diversifying, but this is not a quick or easy process. These are enormous challenges for the entire automotive industry. 

Q: What measures has Mazda implemented to address supply chain challenges?

A: We have learned a lot from past crises, although there is always the possibility of unexpected issues arising. Mazda now has several key strategies that focus on decentralization, engineering and flexibility, and inventories. We cannot rely on a single supplier for all our components; it is crucial to diversify our sources to avoid vulnerabilities. It is also important not to depend on just one product. Through engineering, we develop alternative components that perform the same function, which gives us greater flexibility in case of disruptions. Finally, maintaining a stock of critical parts is essential so that any interruption in the supply chain does not severely impact our business.

Q: What changes has Mazda seen in customer preferences and how is the company adapting?

A: Consumer behavior has changed dramatically in recent years. Before the pandemic, owning a vehicle was considered a major asset, especially in Mexico. During the pandemic, the need to have a personal vehicle increased due to the need to maintain social distancing. But, after the pandemic, consumer preferences changed again. People now seek a well-equipped vehicle that fits their budget, regardless of their age or economic situation.

Q: How do Mazda’s vehicle sales trends vary between different regions in Mexico, and what factors influence these trends?

A: Mazda's new vehicle sales are concentrated mainly in five states: Mexico City, State of Mexico, Jalisco, Nuevo Leon, and Puebla. While we have good penetration in smaller states, the sales volume adjusts to the size of the market. Compact cars are in strong demand in the north and southeast of the country, while hatchbacks are popular in the north.

Q: What role does the used vehicle market play in Mazda’s overall strategy?

A: The used vehicle market is crucial for us because it facilitates the sale of new vehicles. When a customer buys a new Mazda, we can buy their previous vehicle. During the pandemic, the scarcity of new vehicles increased demand for used alternatives, driving up their prices. New vehicles are now available, so the demand for used cars has decreased and prices have adjusted. Nonetheless, Mazda's resale value remains high due to factors such as the absence of incentives, the validity of our warranties, and the cost of ownership over the vehicle's lifecycle.

Q: What specific milestones or achievements does Mazda Mexico expect to reach by the end of 2024 and 2025?

A: By the end of 2024, we aim to achieve a market share of 6.6%, which would mean selling around 99,000 vehicles. In 2025, Mazda Mexico will celebrate its 20th anniversary, and we hope to reach two significant milestones: selling 1 million units in Mexico and producing 2 million units at our Salamanca plant.