Mazda introduces SKYACTIV Gen2 models as part of next mid-term plan
Goal to raise fuel economy by 50% from 2008 levels through SKYACTIV and electric drives
|All-new Mazda Roadster launched in May 2015
(Photo courtesy of Mazda)
This report focuses on Mazda Motor Corporation's model plan and production capacity plan based on its next mid-term business plan called "Structural Reform Stage 2" that covers fiscal years starting from April 2016 through March 2019. The business plan was announced in April 2015.
Mazda reported net deficits in the fiscal year ended in March 2009 (FY 2009) through FY 2012. In 2012, Mazda introduced the new-generation models which adopted Skyactiv technology and a new design theme dubbed Kodo ("Soul of Motion") design. Since then, the company's performance is improving substantially due in part to the weaker yen as well.
Mazda plans to introduce eight new-generation models by the end of FY 2016 that will raise the ratio of Skyactiv models to more than 85% of its global sales and increase the corporate average fuel economy (CAFE) by 30% over the 2008 levels. The company's next mid-term business plan includes the introduction of the second-generation Skyactiv (Skyactiv Gen2) models that feature the Homogeneous-charge Compression Ignition (HCCI) combustion technology. Mazda will strengthen its electric drive technologies starting in FY 2020 and raise its CAFE by 50% in 2020 over the 2008 levels.
Mazda will strengthen overseas production especially in Mexico, Thailand and China to build a system that is least affected by currency exchange fluctuations. During the next mid-term business plan, Mazda will maintain production volumes high at home (reportedly more than 850,000 units in Japan) and meet additional future demands by increasing its capacities in plants overseas.
Mazda's record profits in 2013 due to success of SKYACTIV models (Jul. 2014)
Mazda: Future prospects of advanced ICEs for passenger cars (Jun. 2015)
Introduction of SKYACTIV Gen2 models during Structural Reform Stage 2 mid-term plan
Mazda disclosed its financial results for the fiscal year ended in March 2015, in April 2015. At the same time, the company announced a new mid-term business plan called Structural Reform Stage 2 that covers the three fiscal years from April 2016 through March 2019. The new plan follows the present "Structural Reform Plan" that ends at the end of March 2016. The new mid-term plan calls for global sales volume of 1.65 million units and operating profit ratio of 7% or more.
As for the new-generation products, Mazda will launch eight models under the Structural Reform Plan that ends at the end of March 2016, and five more models under the Structural Reform Stage 2. The company will also start the development and launch of the Skyactiv Gen2 models during the Structural Reform Stage 2 (their full-scale roll-out is planned for the future medium-term plan that starts in April 2019.).
It is said that the Skyactiv Gen2 models will feature Homogeneous-charge Compression Ignition (HCCI) combustion that Mazda considers as the ultimate combustion technology. Please refer to the report below for more information.
Strengthening electric drive technology and Skyactiv to achieve 50% higher CAFE in 2020 over the 2008 levels
By introducing Skyactiv technology, Mazda's CAFE is expected to increase by 30% in 2015 from the 2008 levels. In the future mid-term plan starting in the fiscal year starting from April 2019 (FY 2020) following Structural Reform Stage 2, the company will strengthen its electric drive technologies and combine them with the second-generation Skyactiv technology to achieve a 50% improvement in CAFE in 2020 from the 2008 levels. In May 2015, Mazda and Toyota announced an agreement toward mutually beneficial partnership to complement and enhance each other's products and technologies. Regarding electric drive technologies, Mazda will enhance the value of Skyactiv technologies with the help of Toyota.
Mazda's mid-term business plans
|Structural Reform plan||Structural Reform Stage 2||Future mid-term business plan|
|FY 2013-2016 (Apr. 2012-Mar.2016)||FY 2017-2019 (Apr. 2016-Mar. 2019)||FY 2020- (Apr. 2019-)|
|Change of business structure by structural reforms||Qualitative growth and brand value improvement||Further sustainable growth|
|Product & R&D||Skyactiv <Gen1>||* Continuous evolution of Skyactiv products||* Introduce Gen2 models <Gen2>|
|* Develop and launch Gen2 models||* Enhance electric drive system|
|Global production||Reinforce production capacity in Mexico, Thailand, Russia and Malaysia||Support sales growth by maximizing plant utilization||Expand production capacity for quantitative growth|
Quantitative targets in final years
|FY 2016||FY 2019|
|Sales volume||1.49 million units||1.65 million units|
|Revenues||JPY 3.3 trillion||JPY 3.7 trillion|
|Operating ROS||6.5%||7% or more|
Source: Mazda's FY 2015 Financial results
Agreement on building a partnership with Toyota
|In May 2015, Mazda and Toyota entered an agreement to build a mutually beneficial long-term partnership by leveraging their resources to complement each other's products, technologies and regions with the goal of "producing more appealing cars." A joint committee will be set up to evaluate how best to utilize each company's respective strengths toward meaningful collaboration across a broad range of fields including environmental and advanced safety technologies.|
|Current collaboration between the two companies included the licensing of Toyota's hybrid technologies to Mazda and production of Scion-brand cars based on the all-new Mazda2 for Toyota at Mazda's plant in Mexico starting in the summer of 2015.|
|The new partnership is not limited to specific fields. It will likely include the licensing of Toyota's plug-in hybrid, electric vehicle and fuel cell vehicle technologies to Mazda and Mazda's licensing of its Skyactiv technologies to Toyota. Collaboration in IT fields may also be considered although capital alliance is out of the partnership.|
Source: Mazda and Toyota joint press releases May 13, 2015/Nov. 9, 2012
Launching all-new CX-9 to establish 8-model lineup by March 2016
In 2012, Mazda launched the CX-5 and the all-new Atenza as the new-generation products fully based on Skyactiv technology and Kodo - Soul of Motion - design. Mazda now has six new-generation cars in Japanese market including the all-new Roadster that was launched in May 2015. The company plans to launch two models including the all-new CX-9 by March 2016 to have a total of eight carlines. Mazda forecasts that Skyactiv models will account for more than 85% of its global sales in FY 2016.
Mazda's next-generation carlines (Japanese specifications)
|Launched in Japan||Models||Powertrains|
Source: Mazda's press releases (Note) The six carlines listed above and the two to be launched in FY 2016 are all built with first-generation Skyactiv (Gen1) technology. Second-generation Skyactiv (Gen2) models will be introduced in the upcoming medium-term business plan covering FY 2017 to FY 2019.
New-generation carlines: All-new Mazda2, CX-3 and all-new Roadster launched in the most recent year
Mazda launched the all-new Mazda2 in September 2014, the Mazda2-based CX-3 compact SUV in February 2015, and the all-new Roadster in May 2015. The Mazda2 is produced in Japan (at Hofu plant), Mexico and Thailand and Mazda plans to sell 200,000 units a year globally. The CX-3 is produced in Japan (at Ujina plant) and sold in 120 countries. According to Mazda's forecasts, its operating profit will increase from JPY 95 billion in the first half of FY 2016 to JPY 115 billion in the second half, taking into consideration that the CX-3 and Roadster will be sold globally starting in the summer this year.
|All-new Mazda2 planned for global sales of 200,000 units a year and launched in September 2014 (Photo courtesy of Mazda)||The CX-3 compact SUV launched in February 2015 (only the diesel-fueled version is available in Japan) (Photo courtesy of Mazda)|
New-generation carlines launched by Mazda during the past year
|September 2014||All-new Mazda2||Mazda launched the all-new Mazda2 (sold as the Demio in Japan) fitted with the Skyactiv-G 1.3 gasoline engine and the Mazda2 fitted with the newly-developed Skyactiv-D 1.5 diesel engine in September to October 2014. The Mazda2 equipped with the all-new AWD system which had been introduced in the CX-5, was made available and launched in December. The monthly sales target of the all-new Mazda2 in Japan is set at 5,000 units.|
|The hatchback and the sedan variants have been developed but only the hatchback type is sold in Japan. The all-new Mazda2 has achieved JC08 fuel economy of 24.6km/liter on the gasoline-fueled model (front-wheel drive with 6-speed AT) and 30km/liter on the diesel-fueled model (front-wheel drive with 6-speed MT). Mazda received orders for 19,233 units of the new Mazda2, nearly four times more than the monthly sales target, by October 30, only 50 days after order-taking started. The diesel-fueled model accounted for 63% of the total orders.|
|February 2015||CX-3||The Mazda2-based compact SUV launched in Japan is powered exclusively by a 1.5-liter diesel engine in combination with the 6-speed MT/AT (both diesel and gasoline-fueled CX-3 are available in other markets). It has maximum torque of 270N･m, larger than that of vehicles powered by a 2.5-liter gasoline engine. This has led to the excellent driving performance and JC08 fuel economy of 25km/liter (front-wheel drive with 6-speed MT).|
|The CX-3 is produced at Ujina plant in Hiroshima with annual quantity of 150,000 units and will be sold in 120 countries starting with Australia in the spring of 2015 and in the U.S. and Europe in the middle of 2015. Mazda has a monthly sales target of 3,000 units in Japan.|
|May 2015||New Roadster||This is the fourth-generation Roadster fully redesigned for the first time in ten years. It is built on a newly-developed platform that weighs 100kg less than the previous model. It is powered by the newly-developed SKYACTIV G1.5 direct-injection 1.5-liter gasoline engine. It features a timeless design that will not fade away in 25 years. Its monthly sales target is set at 360 units.|
Source: Mazda's press releases Sep. 11, 2014/Feb. 27, 2015/ May 20, 2015.
Maintaining high plant utilization in Japan; overseas production for future demand
Mazda produced 919,000 units in Japan and 456,000 units overseas in FY 2015. The ratio of overseas production rose from 23.3% in FY 2014 to 32.3%, up 10% after the start of production in Mexico. During the past few years, Mazda exported nearly 80% of vehicles produced in Japan. As the Japanese automaker having the highest export ratio, Mazda had net deficits in FY 2009 to FY 2012 due to global recession and yen's appreciation. The company planned to increase capacities at its plants in Mexico and Thailand to build a corporate structure that is less affected by exchange fluctuations. It was reported that Mazda was set to achieve an overseas production ratio of 50%.
With the yen growing weak since then, Mazda announced in the forecast released in April 2015 that it will "maintain high levels of utilization of Japanese plants and respond to future volume growth by increasing production at overseas plants." According to Mazda, achieving overseas production ratio of 50% is not a target and a higher efficiency could result from over-concentration of production. Hence, Mazda feels that forecasting overseas production ratio is rather difficult as the company must keep balancing the efficiency and the risk of exchange fluctuations.
Mazda's production in Japan and overseas
|FY 2010||FY 2011||FY 2012||FY 2013||FY 2014||FY 2015||FY 2016 Plan|
|Exports/production in Japan||78.4%||82.9%||77.2%||80.0%||81.3%||80.3%||-|
|Source: Mazda's Financial results|
|(Notes) 1.||Mazda has major overseas production sites in China, Thailand and Mexico. Mazda also has eight plants in Russia, Columbia, Taiwan and other places other than those three countries. The company produced over 80,000 units in eight countries in 2014.|
|2.||Production of the Mazda6 at Flat Rock plant in Michigan, a joint venture with Ford, ended in August 2012.|
|3.||Mazda plans to sell 1.65 million units and maintain production in Japan at 850,000 units in FY 2019, the final fiscal year of the next medium-term business plan.|
Mexican plant: Volume production of Mazda2 and Mazda3
|The Mazda2-based Scion iA sedan produced by Mazda for Toyota and Scion iM hatchback based on Toyota Auris. Both models are slated for launch in September 2015. (Photo courtesy of Toyota)|
Mazda started volume production of the Mazda3 (sold as the Axela in Japan) in January 2014 and the Mazda2 in October of the same year at the new plant in Mexico. Exports of the Mazda2 to Europe has also begun. An engine machining plant started operating in October and production of diesel engines started there to be fitted in the vehicles being exported to Europe. Mazda has announced plans to increase the annual capacity of the car assembly plant to 250,000 units by March 2016.
Other than the cheaper labor costs, Mexico has its strength in that it has concluded Free Trade Agreements with many countries and areas. Mazda reportedly is considering production of medium to large-size vehicles which are larger than the Mazda3 or Mazda2 in Mexico. Mazda's investment in the plant, including the engine machining plant, has reached USD 770 million.
Mazda's footprints in Mexico
|2005||Entered the Mexican market (import and sale).|
|October 2011||Ground-breaking ceremony of the Mexico plant with initial production capacity of 140,000 units a year.|
|November 2012||Plans announced to produce 50,000 units of Toyota-brand vehicles for Toyota starting in the summer of 2015.|
|January 2013||Plans announced to increase annual capacity of the Mexican plant to 230,000 units in FY 2016.|
|January 2014||Volume production of the Mazda3 started.|
|October 2014||Volume production of the Mazda2 started. An engine machining plant was completed and started production of the Skyactiv engines Plans announced to increase annual capacity of the Mexican plant to 250,000 units by March 2016.|
Source: Mazda's press releases
Plants in Thailand: Production of Mazda2 started and the new transmission plant started operating
In October 2014, Mazda started production of the Mazda2, certified as an eco-car by the Thai government, at Auto Alliance (Thailand) plant, a joint venture with Ford. The plant has two lines. The first line has a capacity to produce 140,000 pickup trucks a year and the second line has a capacity to produce 120,000 units of passenger cars a year. Mazda and Ford previously used half of each line. Production of the Ford Fiesta in the second line ended in the first half of 2014 and the line was made available fully for Mazda in the second half of the year. Mazda needs to produce 100,000 units of Mazda2 a year in the future to comply with the Eco Car program and now the company has that capability.
In November 2014, Mazda announced the construction of an engine assembly plant in Thailand. In January 2015, Mazda started production of automatic transmissions at a new transmission plant.
Mazda: Strengthening production capacities in Thailand
|October 2014||Production of Mazda2 started||Production of the all-new Mazda2 started on the passenger car assembly line at Auto Alliance (Thailand) plant. The all-new Mazda2 has been granted as an eco-car in the second phase of the Eco Car program in Thailand. The second passenger car assembly line has production capacity of 120,000 units and was previously shared by Mazda and Ford. Since Ford started production at its own passenger car plant in Thailand, the second line at the Auto Alliance (Thailand) plant is now fully available for producing Mazda models starting in the second half of 2014.|
|November 2014||Construction of engine assembly plant announced||A plan was announced to construct a new engine assembly plant next to the transmission plant that had been completed in Thailand. The new plant will start assembling the Skyactiv-D 1.5 engines for Mazda2 in the fourth quarter of 2015. The new engine assembly plant will be built to meet Thai government's requirements under its Eco Car program. It will start with an annual capacity of assembling 30,000 engines. Mazda will build an engine machining plant to meet the Eco Car preferential taxation program and plans to increase overall production capacity.|
|Thailand is Mazda's fourth Skyactiv engine production site after Japan, China and Mexico.|
|January 2015||Production at transmission plan started||Production started at the new transmission plant with an annual capacity of 400,000 units. The plant will produce Skyactiv-Drive (AT) for the Mazda2, Mazda3 and CX-5 being produced in Mazda's global production sites including Thailand. With the addition of the new transmission plant in Thailand, Mazda has a global capacity of 1.54 million transmissions including those produced at Hofu plant in Japan.|
Source: Mazda's press releases Nov. 6, 2014/ Jan. 13, 2015.
Global sales volume and financial results forecast
Mazda's global sales volume in FY 2016 is forecast at 1.49 million units. The company expects sales increase across the world. At home, Mazda expects that it will be the only Japanese automaker that will end FY 2016 with a sales increase in Japan with the launch of the all-new Mazda2 and the newly-introduced model, CX-3.
Mazda suffered from net deficits in FY 2009 through FY 2012, but its financial standing recovered significantly in FY 2013 with the effects of the Skyactiv model launch and the weaker yen. As for the operating profits in FY 2016, the sales volume and the model mix will push the figure by JPY 40 billion. However, the depreciation of euro, ruble and other currencies will have adverse effects on exports to Europe including Russia and these negative factors will reduce the operating profits by JPY 34 billion. Mazda expects to end FY 2016 with a record-high forecast of JPY 210 billion in operating profits. The year-over-year growth was 3.4% in FY 2014 and 11% in FY 2015, but will plummet to 3.5% in FY 2016.
Mazda is investing aggressively in equipment and R&D. The company invested more than JPY 130 billion in equipment, such as increasing capacities in Mexico and Thailand, in FY 2014 and FY 2015. Mazda's R&D cost is also increasing year after year. It is expected to be JPY 125 billion in FY 2016.
Global Sales Volume
|FY 2010||FY 2011||FY 2012||FY 2013||FY 2014||FY 2015||FY 2016 Plan|
Source: Mazda's Financial Results (Note) Mazda's sales volume in Japan as of June 2015 was 21,289 units including mini vehicles (preliminary report), up by 47.3% (Japanese automakers registered a 2.2% decrease overall in the home market). The cumulative sales volume during the first half of 2015 was 139,125 units, up 14.5% (whereas Japanese automakers saw an 11.0% decrease in the same period).
Mazda's consolidated results
|(in millions of JPY)|
|FY 2010||FY 2011||FY 2012||FY 2013||FY 2014||FY 2015||FY 2016 Plan|
|Operating profit margin||0.4%||1.0%||-1.9%||2.4%||6.8%||6.7%||6.5%|
Source: Mazda's Financial results
Factors behind increase and decrease of operating profits
|(in billions of JPY)|
|Operating profits in preceding fiscal year||Operating profit changes (YoY)||Operating profits in current fiscal year|
|Sales volume, model mix||Currency exchange||Cost improvement||Sales expenses||Others|
Source: Mazda's financial results
Sales Forecast by LMC Automotive: Mazda's sales will be 1.41 million units in 2018
|(LMC Automotive, Quarter 1, 2015)|
According to LMC Automotive's forecast (Q1, 2015), Mazda's light vehicle sales will be 1.40 million units in 2015, up 7.6% from 2014 and 1.41 million units in 2018, up 8.4% from 2014.
Sales in USA, Mazda's largest market by country, increased 7.7% in 2014 from 2013, outperforming the overall market which grew 5.9% YoY. Most of the growth can be attributed to the CX-5 which increased by 24.6% YoY. The CX-5 was introduced back in 2012, but it continued to ride the growth in the demand for Compact SUV segment entries, helping to propel a strong second full year of sales in the US. Also aiding growth was the Mazda6, which was up 22.0% YoY last year.
Sales in China in 2016 will be 243,794 units and will exceed Japan (232,856 units). China will be Mazda's second largest market by country in 2018 with sales forecast of 274,961 units.
Sales in Japan in 2015 will be 248,749 units, up by 13.6% from 2014 thanks to the redesigned Mazda Demio (Mazda2 in overseas markets) and newly introduced CX-3. However, sales in Japan will gradually decrease from 2016 and will be 191,561 in 2018.
Sales in Australia, Mazda's fourth largest market will maintain sales volume over 100,000 units mark through 2018.
Mazda's sales forecast through 2018
|Source: LMC Automotive "Global Automotive Sales Forecast (Quarter 1 2015)"|
|(Notes) 1.||Data indicates figures of only small-size vehicles, including passenger cars and light commercial vehicles with gross vehicle weight of under 6 tons.|
|2.||All rights reserved. Reproduction of any data will require permission of LMC Automotive.|
|3.||For more information or inquiries of forecast data, please contact LMC Automotive.|
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