How Mazda Transformed Itself From Also-Ran to World-Leader

mazda 3
Source: Mazda

Seemingly out of nowhere, Mazda has emerged to become one of the most exciting automakers in the world. While Honda struggles, Nissan focuses on building volume-sellers, and Toyota battles with Volkswagen AG and General Motors to remain the world’s largest automaker, Mazda has developed one of the most competitive and well-rounded lineups in the world, bringing some long-overdue attention to the small brand. The 2014 fiscal year was the most profitable in the company’s 94 year history, with growth in all global markets, and the company is already on track to have an even better 2015.

But despite its new role as a world-beating contender, it’s still one of the smallest automakers in the U.S., accounting for only 1.8% of new cars sold in 2014. While selling 305,804 cars in the U.S. was considered a great year for the company, Toyota sold 2,004,373 cars in comparison. Still, Mazda has always been an outsider compared to the other major automakers, and its longtime niche status has given the company freedom to develop a unique design language all its own. After maintaining a cult following for decades, its impressive new lineup is bringing a growing number of buyers into showrooms, proving that its years as one of the most unique automakers in the world is finally starting to pay off.

Source: Mazda

Few automakers have a history as unique and tumultuous as Mazda’s. The company was founded in 1920 as a machine shop in Hiroshima, a city not known for heavy industry. In 1931, the company introduced its first vehicle, a three-wheeled motorcycle called the Mazda Go, and during World War II, the company built rifles for the Japanese Army. After the war, Mazda resumed building its three-wheelers, eventually graduating to building light trucks.

In 1960, it released its first car, the R360 (beating Honda’s first car to market by three years), which became an instant success in Japan’s burgeoning “kei car” segment. Within a few years, Mazda’s engineers began to look to the future, and invested in an avant-garde new engine that had the potential to revolutionize the automotive industry, and would come to define the company: the Wankel rotary engine.

Source: Mazda

Unlike a conventional internal combustion engine, the rotary utilizes a lightweight, compact design that replaces pistons with a triangular rotor, making the rotary a simpler engine with fewer moving parts, smoother performance, and higher revolutions per minute. Developed by German company NSU (who would soon be absorbed by Volkswagen), Mazda licensed the technology and set about building a radical car that lived up to its new powerplant. The Cosmo Sport was introduced in 1967, and gave Mazda nearly instant credibility in the nascent Japanese performance car market. By the end of the decade, the company felt confident enough to begin selling cars in the U.S., entering a market where even the largest Japanese automakers were struggling to win over buyers.

Mazda sought to differentiate itself with its rotary technology, which was so popular by the early 1970s that even a rotary-powered Corvette was discussed. The company enjoyed early success in America with the small Mazda Rotary Pickup, designed exclusively for the American market, and its RX-2 and RX-3 sporty cars. Unfortunately, the success was short-lived as the company plunged into turmoil during the fuel crisis of the mid-1970s. While the rotary engine had definite benefits over standard engines, they were less fuel efficient, produced higher emissions, and had shorter lifespans. By the mid 1970s, Mazda had largely shifted focus back to conventional engines, tuning the rotary for increased performance and making it exclusive to one model: the now-legendary RX-7.

Source: Mazda

In the U.S., the RX-7 brought much-needed attention to the company as it struggled to reinvent itself as a builder of small, reliable economy cars. The RX-7’s modern styling and strong performance caught on with American performance buyers and the GLC hatchback (for Great Little Car) became a strong seller for the brand. In 1979, Ford bought a 7% stake in the company, beginning a long working partnership that made the company viable in the U.S. market and helped it survive another tumultuous 30 years.

Miata concept
Source: Mazda

In the 1980s, Mazda competed in a field flooded with Japanese imports. While Toyota, Honda, and Nissan were enjoying booming sales in the U.S. market, the brand struggled to itself from second-tier competitors like Subaru, Isuzu, Daihatsu and Mitsubishi. A booming Japanese economy left Mazda flush with cash, and with Ford’s backing, the company built a factory in Michigan. It jointly developed several models, including the Ford Probe/Mazda MX-6, and Ford Explorer SUV (which was also rebadged as the Mazda Navajo). In 1989, the company unveiled the MX-5 Miata roadster, which single-handedly revived the small, affordable sports car market, and gave the company some much-needed attention.

Despite the runaway success of the Miata, Mazda had little else that could bring buyers into its showrooms in large numbers. The Miata and the final-generation RX-7 were highly-regarded performance cars, but the rest of the company’s lineup was unfocused as it struggled to build a brand identity for much of the 1990s. During the Japanese financial crisis of 1997, Ford seized controlling interest in the company and began plans to build future models on Ford architecture. Ford revitalized Mazda’s distributorships and dealer networks, and quickly made the brand profitable. With a strong infrastructure in place, Mazda was able to focus on building a competitive lineup, piece by piece.

Source: Mazda

In 2000, the company began its long-running “zoom-zoom” ad campaign, showing the emotional connections drivers develop with their Mazdas, and it soon had models that could live up to its claim. Introduced in 2003, Mazda brought back a rotary-powered sports car in the RX-8. By the middle of the decade, the Mazda3 and Mazda6 were considered some of the strongest cars in their classes, and the MazdaSpeed performance versions proved that Mazda genuinely could bring fun-to-drive performance to nearly every model in its lineup.

Mazda CEO Kicks Off Los Angeles Hosts Annual Auto Show
Source: Mazda

In the midst of the global financial crisis, Ford divested itself of Mazda, and by 2010 had reduced its share to less than 3%. Even with a weak economy and banks reluctant to lend money, Mazda was stable enough to buy a portion of Ford’s shares, and raise additional capital to build a new factory in Mexico. The company hit full stride in 2013 with lineup-wide reinvention and introductions of the the next-generation Mazda2, Mazda3, Mazda6, and CX-5 Crossover. Seemingly overnight, the company had transformed itself from an often-forgotten builder of off-beat cars to a world-class automaker with a stronger full lineup than almost any other automaker in the world.

For the past several years, Mazda’s design team has been designing cars using “Kodo,” meaning “soul of motion,” and is meant to evoke an emotional response in the driver – a physical manifestation of “zoom zoom.” So far, it’s been a runaway success. These new Mazdas are more stylish, better built, and better engineered than almost all of their competitors. Using advanced powertrain engineering that Mazda calls “Skyactiv Technologies,” the engine, transmission, and chassis is designed for maximum power, handling and fuel economy, delivering an exciting driving experience that extends across the entire model line.

Source: Mazda

Since their transformation, Mazdas have evoked a response from the automotive press usually reserved for Italian cars, with journalists waxing poetic on their fantastic design, well-appointed interiors, and excellent handling. Much of the lineup is due for a refresh in 2016, along with the introduction of an all-new Miata and CX-3 small crossover. For 2018, the company plans on introducing several more next-generation models, and is considering reviving the rotary-powered RX-7.

In the span of a few short years, Mazda has transformed itself from an also-ran to an industry leader. Despite its success, there are growing concerns that the good times could end abruptly for the company. An article in Car and Driver outlines just how much Ford had sheltered the brand from a host of economic hardships, and how future models must have a greater profit margin if the small company hopes to weather tougher economic climates. Because of this, rumors have been swirling of an impending merger with a larger company, and the most likely candidate is Fiat Chrysler Automobiles.

Speaking at the Geneva motor show, FCA’s Chief Executive Officer Sergio Marchionne said that he has a merger candidate in mind, and added that he imagines collaborating with Mazda on future projects, as the company is using the Miata’s architecture to develop a new Fiat sports car. A merger probably won’t mean the end of Mazda’s success, and if it’s given enough space to keep building fresh, exiting cars using its own unique language, it will continue to grow. Nearly 50 years after selling their first car in America, Mazda has finally arrived. And don’t expect them to go anywhere anytime soon.

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