Mazda: Launches 2nd generation SKYACTIV engine featured in Mazda3 and CX-30

The Large architecture platform covers the premium price range with rear wheel drive layout

2019/08/01

Summary

新型Mazda3
The all-new Mazda3 launched in Japan in May 2019 as the 2nd generation SKYACTIV (at the JSAE Automotive Engineering Exposition 2019)

 This report summarizes the plans and directives of Mazda’s 2nd generation SKYACTIV engine with the launch of its next generation products, the new Mazda3 and the CX-30. The 2nd generation vehicles are equipped with the SKYACTIV-X engine with SPCCI technology, wherein the product group is divided into Small and Large architectures promoting electrification for each group. The Large architecture product group is equipped with the inline 6-cylinder engine with plans to adopt longitudinal engine architecture. The price range has been expanded to reinforce Mazda’s premium-oriented models.

  In the U.S., the largest car market, Mazda will start production of the new SUV (referred to as CX-Secret by Mazda) for the North American market in 2021 at its new plant built in partnership with Toyota. Furthermore, among the 550 sales outlets in the US, it plans to renovate 300 dealerships by 2021 as next-generation dealerships, acting in unison to upgrade products, with plans to promote the Mazda brand image.

  According to the Medium-term management plan Mazda announced in May 2019, the automaker plans to achieve the following business results in the final year of FY2024: vehicle sales volume: 1.8 million units, revenue: 4.5trillion yen, ROS: 5%. Regarding the target for the vehicle sales volume, Mazda made a downward revision from the “2 million units in FY2023” target it announced in April 2018. Although Mazda’s global production capacity is expected to exceed 2 million units with the operation of its U.S. plant in 2021, it is aiming to improve the brand price by controlling discount sales and selling at the standard price level.

  In the fiscal year of 2018, although the ratio of Mazda’s crossover SUV in terms of total sales volume was 49%, the ratio is expected to rise further in the future. Mazda is able to manufacture both passenger cars and SUVs at the same production line in all of its plants worldwide and will build a global swing manufacturing system to respond to high demand fluctuations.


Related reports:

Mazda: Investing JPY250 billion over the next 4 years, aims for 2 million units production(Jul. 2018)
Mazda's next-generation SKYACTIV-X gasoline engine technology(Dec. 2017)



SKYACTIV (2nd generation) product introduction starts from 2019

  In February 2012 Mazda launched the CX-5 in Japan which fully adopted “SKYACTIV” technology and Mazda’s new design theme the “KODO: Soul of Motion”. These have since been deployed to other mainstream models.

  From 2019, Mazda started to launch the 2nd generation product lineup of SKYACTIV starting from the Mazda3 model. On the 2nd generation SKYACTIV, Mazda is planning the following undertakings:
1) Dividing architectures into small product and large product groups
2) Introducing the SKYACTIV-X engine
3) Full-scale engagement into electric cars such as EVs and Plug-in Hybrids, and
4) Introducing Mazda’s autonomous driving system Co-Pilot and next-generation Mazda Connect.

 

Medium-Term Management Policy: Expand price coverage including electrification, premium lineup Mid-term Business Policy

  In May 2019, Mazda announced its 6 year “Medium-Term Management Policy” from the fiscal year of 2019 to 2024. It plans to thoroughly improve its brand value. By expanding advanced technologies for extended powertrain variations including electrification, it plans to expand its price coverage (refer to the illustration below).

<Mazda’s Journey to Premium>

  Although Mazda will maintain the price of the current entry vehicle for each model, it plans to cover a higher price range for premium grade cars with higher added value such as the newly developed powertrains.

  According to Automotive News (June 30, 2019), although Mazda dealerships support its premium brand transition in the U.S., it is also necessary to support automaker’s advertising and campaigns to establish customer acceptance of the premium brand image. Mazda indicated that they will not suddenly increase prices and although they would like to set the prices to be inline with the new technologies, an increase would applied gradually.

<Large Architecture>

  The Large Architecture aims to realize high value-added products from the conventional FF designs that have reached their limitations. The architecture adopts a longitudinal engine, rear wheel drive, achieving excellent maneuverability and ride comfort (the only FR car on Mazda’s lineup is the Roadster). Furthermore, the newly designed inline 6-cylinder SKYACTIV-X gasoline engine and the inline 6-cylinder SKYACTIV-D (2nd generation) have been adopted. The Large Architecture is planned for adoption on next generation model CX-5 and Mazda6 (formerly known as the Atenza in Japan).

  In the FY2018, the ratio of Mazda’s crossover SUV was 49%, for the Large Architecture the ratio of the crossover SUV is expected to be significantly higher. At Mazda, passenger cars and SUVs can all be produced on the same assembly line. It is also building a flexible production system that would be able to adapt to major changes in production plans.

<Downward revision of vehicles sales volume target>

  For the Medium-term management policy, in FY2024 which is the final fiscal year, Mazda aims for sales volumes of 1.8 million units, revenues of 4.5trillion yen, ROS (Return On Sales) of 5%, and ROE (Return On Equity) of 10% profitability. For the vehicle sales volume target, the “2 million units in FY2023” target announced in April 2018 was revised downwards. Mazda’s global production capacity is expected to exceed 2 million units when US new plant operations begin in 2021, however due to the sluggish sales in both the US and China markets, Mazda aims to improve the brand value by continuing to curb discount sales and sell at reasonable prices.

中期経営方針の位置づけ 中期経営方針の位置づけ 中期経営方針の位置づけ
From the “Positioning of Medium-term Management Policy” announced in May 2019 (Source: Mazda)


Mazda launches Mazda3 as the first in its next-generation of products

Mazda Kai Concept
The Mazda Kai Concept showing the “KODO Design” of the 2nd generation product SKYACTIV (exhibited at the 2017th Tokyo Motor Show)

  In January 2019, Mazda launched “Mazda3” in the North American market as the first in its next-generation products. The model has already been launched in the European and Australian markets and aims for global annual sales of 350,000 units. In May 2019, Mazda3 was launched in Japan with target sales of 2,000 units per month. The Mazda3 is based on the concept of “a car that anyone would envy” and “a personal car that brightens everyday life” adopting complete renewal of all the basic elements of design, drive performance, quietness, and texture of the material. The “KODO Design” was further refined to create a unique form.

  Regarding driving performance, the ideal driving position was defined as “the position when a person is walking” and the next-generation vehicle structure technology known as “SKYACTIV-VEHICLE ARCHITECTURE” was developed and adopted in the pursuit of taking maximum advantage of the human body’s inherent ability to balance itself.

  Mazda3 is also targeting customers who are planning to switch from imported cars.

 

4 engine versions available

 The following 4 types of the all-new SKYACTIV engines were developed.

- 1.5L inline 4-cylinder direct injection gasoline engine “SKYACTIV-G 1.5”

- 2.0 L inline 4-cylinder direct injection gasoline engine “SKYACTIV-G 2.0”

- 1.8 L inline 4-cylinder direct injection clean diesel turbo engine “SKYACTIV-D 1.8”

- 2.0 L inline next-generation gasoline engine “SKYACTIV-X”

  The SKYACTIV-X is a world first internal combustion engine that commercialized Mazda’s proprietary combustion method, the SPCCI (Spark Controlled Compression Ignition). It combines the free-revving characteristics of a gasoline engine with the fuel efficiency, torque and fast initial response of a diesel unit. Further, combined with a mild hybrid system “M Hybrid”, improvement of fuel consumption efficiency is supported with an efficient motor assist system. The model with this technology is planned for launch in October, however as of July 2019, information such as fuel economy data has yet to be announced.

  The price of the all-new Mazda3 was also upgraded. The tax-included price of the FASTBACK (hatchback) is from 2,181,000~3,621,400 yen, which is around 10% higher than the price of the Axela at 1,825,200~3,310,200 yen launched with a minor change in August 2017.

 

Mazda CX-30 launched: second model in new-generation lineup

Mazda CX-30
The Mazda CX-30 (Source: Mazda)

  In March 2019 Mazda exhibited a world premiere of the all-new compact crossover SUV “Mazda CX-30” as the latest in its next-generation products. It plans to start a global launch of the model as one of its main models from this summer, beginning in Europe. It has the elegant style that embodies Mazda’s design philosophy “KODO”, a new compact crossover combining the power of an SUV. The size is between the CZ-3 and the CX-5, targeting young families. It will be sold worldwide in 130 countries and will be developed into a core car model that ranks alongside the CX-5.

  The powertrains in the European specification of the CX-30 will use 3 types of powertrains namely SKYACTIV-G 2.0, SKYACTIV-D 1.8, and SKYACTIV-X. The SKYACTIV-G 2.0 and the SKYACTIV-X will be combined with the mild hybrid technology “M Hybrid”.

  Further, it be equipped with the SKYACTIV-VEHICLE ARCHITECTURE.

 

Japanese model name changed to global name to emphasize Mazda brand

  Mazda changed the name of its Japan Axela model to the global model name of Mazda3 in time for the new model launch in May 2019. In August of the same year, it also changed the name of the Atenza to Mazda6 in time for introducing the modifications to the “SKYACTIV-G 2.T” 2.5L gasoline turbo engine. The Demio model name will also be changed to Mazda2 in September.

 Along with emphasizing the “Mazda Brand”, starting with the Mazda3, it is aiming to appeal to the concept of expanding the coverage of the premium price range with high quality for future new vehicle models. Mazda would like to present the Mazda3 as a totally new car model and not as a successor of the Axela. The Roadster and CX-models will continue to maintain their current names.



U.S. plant starts operations in 2021, aims to sell 400,000 units annually in the U.S

  In March 2018, Mazda and Toyota established a new joint-venture company “Mazda Toyota Manufacturing, U.S.A., Inc.” that will produce vehicles in Hunstville, Alabama. Toyota and Mazda invested $1.6 billion towards the project which is expected to create up to 4,000 jobs. The new plant will have the capacity to produce an annual total volume of 300,000 units that comprise 150,000 units of Mazda’s crossover model (Mazda refers to it as “CX-Secret”) that will be newly introduced to the North American market and 150,000 units of Toyota’s all-new SUV.

 

Strengthening of US sales network by investing 40 billion yen over four years

  In addition to the augmented production capacity, Mazda will reinforce its sales network in the United States which is its largest market, investing 40 billion yen for 4 years from FY2018 through FY2021 to build an annual sales capacity of 400,000 units (actual performance for the past several years was around 300,000 units). By the time the new US plant starts operations in 2021, with respect to the plan of aiming to reach 300 next-generation brand dealerships, out of the total of 550 dealerships in the US, investments for 225 dealerships have already been decided. Mazda is aiming for improvement of “customer experience” at the dealerships.

  At the 65 stores that have been completed already, Mazda says that sales volume is steadily increasing. The next-generation brand stores are aiming to sell 1,000 units annually. If each of the 300 stores sells 1,000 units, which fills the 300,000 units target and the remaining 250 stores can be built with a system to provide the additional sales. The average number of vehicles sold at Mazda’s US stores in 2018 reached 522 units (Automotive News, June 30, 2019)

  Mazda reviewed the current bonus system that is based on the number of vehicles sold and change the system to place importance on customer satisfaction and brand standard conformance. It will also reinforce training for the target stores.

  In 2018 Mazda sold 300,325 units in the US, up by 3.8%, however in the first half of 2019 it sold 138.555 units, down by 15.5%. Sedans have continued to be faced with tough sales.

  According to an article in Automotive News dated December 24, 2018, Mazda estimated that the US market had already hit its peak and forecasted that ratio of light trucks will further increase in the future. Rather than stretching its sales volume unreasonably, Mazda intends to improve the quality of its business. Furthermore, in response to fluctuations in demand, it will establish a flexible production system called the “Global swing production” that can adjust the production volume ratio between passenger cars and SUVs.

(Note) Global swing production: reinforced production system that enables plants to supplement and complement each other ~ swing production of Mazda3 and CX-3 in Japan, Mexico, and Thailand, with increased production flexibility between passenger car and crossovers in response to increasing demand in the crossover field.

Construction of the new plant in the city of Huntsville, Alabama, United States. Reinforcing the sales network and improving customer experience

 

Mazda's unit sales in the US by model

2013 2014 2015 2016 2017 2018 Jan.-Jun.
2018
Jan.-Jun.
2017
Mazda2 11,757 13,615 297 2 0
Mazda3 104,713 104,985 107,885 95,567 75,018 64,638 35,796 28,523
Mazda6 43,638 53,224 57,897 45,520 33,402 30,938 18,082 13,075
MX-5 Miata 5,780 4,745 8,591 9,465 11,294 8,971 4,691 3,914
RX-8 1
Cars total 165,889 176,569 174,670 150,554 119,714 104,547 58,569 45,512
CX-3 0 6,406 18,558 16,355 16,899 9,627 6,784
CX-5 79,544 99,122 111,450 112,235 127,563 150,622 81,012 74,387
CX-9 24,628 18,497 18,048 16,051 25,828 28,257 14,716 11,872
Mazda5 13,884 11,613 8,609 375 10 0
Tribute 2
Light truck total 118,058 129,232 144,513 147,219 169,756 195,778 105,355 93,043
Mazda Total 283,947 305,801 319,183 297,773 289,740 300,325 163,924 138,555

Source: Automotive News



Mazda’s CASE Strategy *CASE: Connected Autonomous Shared Electric

ブランド価値向上への投資
Investment for brand value improvement (relating to CASE) (Source: Mazda)

 Mazda will promote the CASE strategy as part of its investment to improving brand value. In this report, topics on electrification, participation in Toyota’s MaaS business, and autonomous driving Co-Pilot will be discussed.

 

Mazda’s strategy for electrification: Electrify all cars in 2030, EV to make up 5% of all sales

  Mazda has promoted the “Building Block Strategy” that combines electric device technologies with internal combustion engine technologies. It is set to adopt full-scale implementation of electrification from the SKYACTIV 2nd generation. The SKYACTIV-X engine to be launched in 2019 is combined with a mild hybrid system. In the future, the diesel engine is also planned to be combined with the mild hybrid system.

  Further, Mazda will sell Battery EVs in 2020 that it independently developed. Even for these EVs, Mazda will provide the “joy of driving” experience by using technologies such as the “G-Vectoring Control”.

  Mazda, Toyota, and Denso established a joint venture EV C.A. Spirit Corporation to jointly develop technologies related to basic EV concepts that can cover a wide range of segments and vehicle types. However, the EV to be launched in 2020 will be that which Mazda independently developed. In China, it also plans to enter into partnership with local companies to launch EVs dedicated to the China market.

  By 2030, Mazda plans to equip all of its vehicles with electrification technologies. However, Battery EVs including the range extender EV using the rotary engine as the generator will only comprise 5% of the total sales volume and the remaining 95% are expected to be equipped with “ICE + electrification technologies”. Since the volume of the EVs is low, Mazda will not develop the hardware in-house but will procure from external sources.

 

MaaS business:Capital and business alliance with MONET Technologies

  In the pursuit of mass deployment of its MaaS business utilizing autonomous driving, Toyota in partnership with SoftBank established and started operations of a new company in September 2019, MONET Technologies, as a third business entity that will be responsible for on-demand mobility services planning, sales, and operations.

  At its initial launch, the capital was 2 billion yen with Toyota’s share at 49.75% and SoftBank at 50.25%. Afterwards in March 2019, Honda and Hino joined into a capital and business partnership. Furthermore, on June, 5 more companies including Mazda also entered into capital and business partnership with the joint venture. With this, all Japanese automakers (except Nissan and Mitsubishi who are in alliance with Renault, Mitsubishi Fuso Truck and Bus, and UD Trucks, both under foreign ownership) have entered into capital and business partnership with MONET.

  By worker together with other MONET participants, Mazda stated that it will pursue the possibilities of mobility services that ‘invigorate the mind and body’ to resolve social mobility issues in cities and regions.”

 

MONET shareholders structure and investment ratios (after each company completes investment)

Shareholder Investment ratio Investment amount
(Total 2,856.70 million yen)
SoftBank Corp Approx. 35.2% 1,005.00 million yen
Toyota Motor Corporation Approx. 34.8% 995.00 million yen
Hino Motors, Ltd. Approx. 10.0% 285.60 million yen
Honda Motor Co., Ltd. Approx. 10.0% 285.60 million yen
Isuzu Motors Limited Approx. 2.0% 57.10 million yen
Suzuki Motor Corporation Approx. 2.0% 57.10 million yen
Subaru Corporation Approx. 2.0% 57.10 million yen
Daihatsu Motor Co., Ltd. Approx. 2.0% 57.10 million yen
Mazda Motor Corporation Approx. 2.0% 57.10 million yen

Source: Nine companies' joint press release 2019.6.28

 

Mazda’s autonomous driving:Mazda’s autonomous driving Co-Pilot

  Mazda is developing autonomous driving technologies based on the human-centric Co-Pilot concept. When the driver’ condition is normal, they are able to enjoy the pleasures of driving the vehicle themselves. The system constantly monitors the driver’s conditions and performs “virtual driving” in the background meaning it is on a standby state ready to drive by itself at any time.

  When the system determines that the driver cannot operate the vehicle in a normal manner, the system takes over the wheel of the driver to avoid hazards such as collisions and moves the car to a safe location to stop the vehicle and provide safety and driver reassurance.

  While Mazda vehicles will be equipped with the same level of autonomous driving technologies as other automakers, Mazda will not develop driver-less cars or cars without steering wheels. It plans to start experimental demonstrations in 2020 with a market launch in 2025.



Operating profits in FY2018 drops by 43.3%, focuses on maximizing production efficiency

  In FY2018, Mazda’s global sales volume dropped by 4.2% to 1.561 million units due to unfavorable sales in North America (-3.2%) and China (-23.3%). Drop in sales of the sedan models continue in North America, and in China there is significant stagnation due to the ongoing trade friction between China and the U.S.

  The operating profits was down by 43.3% to 83 billion yen and operating profit margin at 2.3%. The main causes in profit decline are 14.7 billion yen from volume/vehicle type composition, 38.1 billion yen in foreign exchange, and 31.7 billion yen from quality related expenses and investments in reformation of its U.S. sales network.

  Mazda is planning to add 250 billion yen to its normal capital investment for the fiscal year 2018~ 2021 (4 year period) to reinforce its U.S. dealership network, construct its new US plant, and strengthen its US sales network for future growth.

  In FY2019, the operating profit forecast for the FY2019 remains at 110 billion yen with an operating profit margin at 3.0%. Mazda is to maximize its production efficiency (global swing production) and reinforce its cost improvement activities, create cashflow, build its enterprise base and financial base for a sustainable growth.

 

Mazda's Consolidated Results

(in millions of Yen)

FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019
Plan
Sales 26,922 30,339 34,066 32,144 34,740 35,647 37,000
Operating profit 1,821 2,029 2,268 1,257 1,464 830 1,100
Current profit 1,407 2,126 2,236 1,395 1,721 1,168 1,250
Net profit 1,357 1,588 1,344 938 1,121 635 800
Forex
(yen)
USD 100 110 120 108 111 111 110
EUR 134 139 133 119 130 128 126

Source: Mazda

 

Mazda's global sales by region

(thousand units)

FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019
Plan
Japan 244 225 232 203 210 215 223
North America 391 425 438 429 435 421 456
Europe 207 229 257 262 269 270 286
China 196 215 235 292 322 247 265
Other 293 303 372 373 394 409 387
Global 1331 1,397 1,534 1,559 1,631 1,561 1,618

Source: Mazda



LMC Automotive production forecast: Mazda’s production in 2022 will be 1.8 million units

LMC Automotive, June 2019)

Mazda production forecast

 According to LMC Automotive’s Production Forecast (June 2019), Mazda’s light vehicle production in 2019 will be 1.60 million units, down by 2.7% from 2018. However, growth will return from 2020. Mazda’s sales in 2022 will be 1.80 million units, up by 10.0% from 2018.
  Mazda’s global production has been concentrated significantly in Japan. Around sixty percent of global Mazda’s vehicles are being built in Japan. Mazda’s production in Japan will grow every year during the forecast period and will maintain the level of a million units through the 2020 to 2022 period.

 China, Mazda’s second-largest production country, will continue to produce around 250k units through 2022.

 The new plant in Huntsville, Alabama, U.S., jointly established with Toyota, will start to produce 150,000 units of Mazda’s crossover model that will be newly introduced to the North American market and 150,000 units of the Toyota vehicle in 2021.

 LMC Automotive comments; “From 2021 to 2022, we expect total North American production to rise by over 450k units, the largest YoY volume growth during the forecast period. This increase in production will follow two years of rapid capacity expansion in the region, with over 1 mn units of capacity set to be added to North American plants from 2020 to 2021. Much of this increase will come from new plants, such as the Toyota and Mazda joint plant in Huntsville, which will produce the Mazda CX-7 and Toyota Midsize SUV.”

 

Mazda's production in 2022 will be 1.80 million units (LMC Automotive)

COUNTRY GLOBAL MAKE 2016 2017 2018 2019 2020 2021 2022
Mazda Motors total 1,572,889 1,614,521 1,638,713 1,595,170 1,651,265 1,669,400 1,802,743
Japan Mazda 926,234 945,385 974,902 998,516 1,082,007 1,049,076 1,074,130
China Mazda 282,704 314,594 277,331 240,628 245,793 249,933 253,398
Thailand Mazda 134,981 134,931 136,176 143,732 117,113 145,070 165,958
Mexico Mazda 149,235 141,774 149,589 130,042 125,248 115,746 111,105
USA Mazda 0 0 0 0 0 30,938 108,807
Vietnam Mazda 30,960 24,688 32,800 29,556 31,210 31,843 33,496
Russia Mazda 24,110 24,089 31,133 28,778 24,175 23,831 31,948
Malaysia Mazda 10,748 11,530 22,688 22,012 22,463 19,325 19,999
Chinese Taipei Mazda 1,121 0 0 1,523 2,579 2,558 2,631
South Africa Mazda 662 529 500 383 677 1,080 1,271
Iran Mazda 12,134 17,001 13,594 0 0 0 0

Source: LMC Automotive "Global Automotive Production Forecast (June 2019)"

(Note)
1. Data indicate figures of only small-size vehicles, including passenger cars and light commercial vehicles with a gross vehicle weight of under 6 tons.
2. All rights reserved. Reproduction of any data will require permission of LMC Automotive.
3. For more detailed information or inquiries about forecast data, please contact LMC Automotive.


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Keywords
Mazda, SKYACTIV, SKYACTIV-X, Mazda3, Mazda CX-30, Small/Large architecture, Global swing production

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