Mazda: New generation CX-30 and MX-30 with SKYACTIV-X engine

Maintaining the medium-term management plan, but extending the period by one year

2020/09/08

Summary
Introduction of the new generation CX-30 and MX-30 models and SKYACTIV-X engine
Launch of the Mazda3 and CX-30 equipped with the SKYACTIV-X engine
The third new generation MX-30 product: Mazda’s independently-developed EV to be introduced in Japan by the end of FY2020
Ended in-house development and production of commercial vehicles and switched to OEM consignment procurement
Q1 2020 (April-June) financial results: Sales volume down 30%, operating loss JPY 45.3 billion
Medium-Term Management Plan: Aiming for qualitative growth and brand value improvement
U.S. market: SUV production will begin at the new Alabama plant at the end of FY2021
Sales Forecast by LMC Automotive: Mazda Motors’ light vehicle sales in 2023 will be 1.65 million units

Summary

New Mazda Toyota plant under construction in Alabama
(Source: Toyota and Mazda joint press release)

This report focuses on the developments at Mazda over the past year.

Mazda launched a new generation of mainstream products (first the Mazda 3, and second the CX-30 compact crossover SUV) starting in 2019, as well as SKYACTIV-X-powered versions of both models. Mazda will begin leasing its third new generation model, Mazda's first EV, the MX-30, by the end of FY2020.

In November 2019, the company created a six-year medium-term management plan for FY2019 to FY2024. The plan looks back on the current product generation for the previous seven years from FY2012, when the first generation CX-5 was introduced, to further improve Mazda’s brand value and increase pricing coverage. During this period, Mazda will also introduce a rear-wheel-drive, straight-six Large Architecture model, and announced that it aims to sell 1.8 million units, generate sales of approximately JPY 4.5 trillion, and achieve an operating profit margin of 5% in FY2024, the final year of the plan.

However, due to the impact of the COVID-19 crisis, Mazda posted net sales of JPY 376.7 billion (down 55.6% y/y) and an operating loss of JPY 45.3 billion in Q1 (April-June) of FY2020. Mazda expects sales to return to positive growth in the second half of FY2020 and profit levels to recover and the company to return to profitability in the next fiscal year. However, due to the slowdown in the first half of the year, the company expects net sales of JPY 2.85 trillion (down 16.9%), an operating loss of JPY 40 billion, and a net loss of JPY 90 billion for the full fiscal year ending March 31, 2021.

As for its medium-term management plan, the company will maintain the basic direction and revise the details of the plan because of the uncertainty of market demand. The company will introduce new products and derivative vehicles and make capital investments in a phased manner in line with the recovery in demand and sales growth. As for the numerical plan, the timing for achieving the above targets for the plan will be extended by one year to FY2025, but the sales and profit targets will remain unchanged. Details of the revised medium-term management plan will be announced later this fall.

In the U.S., which is Mazda's largest market by country, the CX-30 launched at the end of 2019 contributed to the company’s strong performance during the January to June 2020 period, with sales of 129,000 units (down 7.0%), despite the 23.5% decline in the overall U.S. light vehicle market. The company’s new Alabama plant, which is under construction jointly with Toyota, plans to produce 150,000 SUVs each for Mazda and Toyota annually starting at the end of 2021.

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