MAZDA SOUTH AFRICA

Mazda South Africa aiming to go from strength to strength in 2020

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Changing the way South Africa sees vehicle manufacturers

There is no hiding from the fact that new car sales in South Africa have taken a hit over recent years. Although the economy is weak, one major factor in this decline sits firmly at the door of consumer trust. There have been many stories over the past few years of car manufacturers letting their customers down. This has happened for a variety of reasons, not least the vehicles failing to deliver on what was promised. This lack of trust has led to many a car owner rather sticking with what they have and avoiding the unknown of purchasing a new vehicle.

These fears are very much at the top of Mazda South Africa’s priority list for 2020. The need for concrete relationships between the manufacturer, the dealer and the customer is of paramount importance to the company.

Managing Director of Mazda SA, Craig Roberts, is at the forefront of this much-needed change in perception. Roberts, who has been MD at Mazda SA since April 2017, is hoping that the more the company starts to integrate itself into the South African psyche, the more Mazda will become a trusted brand of choice among motorists.

“Mazda SA has had a fantastic first six years since becoming independent in the South African market. This is due to the incredible product that Mazda Corporation continues to produce, and the amazing partnerships we have with our dealer partners and all of our stakeholders. We are committed to our Mazda owners and will look to consistently provide them with the Mazda experiences they expect and deserve,” Roberts says.

“I would also want to ensure that Mazda SA continues to be a company that contributes positively to not only the South African economy, but the greater community and its needs wherever we can.”

In terms of Mazda’s progress in 2020, ensuring that the brand is perceived as an industry leader in product and trust is of utmost importance to the company. This shows the commitment demanded by Roberts and his team—and a lot of that starts at a dealership level.

“From a near- to long-term perspective, the repositioning and growth of the Mazda brand value is an important goal for Mazda SA. Mazda SA continues to work towards achieving the best possible results in our three main focus areas: volume and share, profitability, and customer experience. Specifically, we will be continuing with what seems to have become a somewhat unique strategy in our industry, that of ‘Keeping it Simple’, by building and maintaining strong and genuine mutually beneficial partnerships with our dealer partners,” according to Roberts.

“The cornerstone of the Mazda SA business is the true partnership we have with our dealer partners. From the outset, Mazda SA has striven to ensure that we have an open, honest and genuine partnership with our dealers, where success is our mutual objective. We believe that we have 52 customers—our dealerships and dealer partners. If we provide these customers with the correct levels of empowerment and support, we enable them to deliver ultimate customer experiences to their customers—our Mazda owners.”

While Mazda has played a massive role in the South African motoring industry for many years, it was not until six years ago that Mazda became an independent brand in the country. This move has allowed Mazda to forge forward without restriction in the local market, and Roberts believes the brand is only going to go from strength to strength.

“An independent Mazda in SA has allowed us to re-establish and re-ignite the strong heritage and legacy that Mazda and its cars have always had in the South African market. It also allowed for the re-establishment of Mazda as a Japanese automotive brand. In addition, Mazda SA had the opportunity to establish a completely new network of dealerships owned and operated by carefully-selected dealer partners and owners,” says Roberts.

“It is our aim to be recognised—an alternative to those brands that are currently perceived as premium in the South African automotive market. Mazda products, Mazda quality, Mazda technology, and Mazda customer experiences are always the drivers for the ‘alternative premium choice’ we offer. We have aspirations of elevating Mazda’s brand value in the South African market to offer a value proposition comparable to premium brands but at more affordable pricing. The definition of ‘alternative premium’ was perhaps best summed up by Mazda SA’s founding MD, David Hughes, who, when asked a similar question in 2014, said: ‘Will we get to the space that Audi, Mercedes Benz and BMW operate in? No. But we are aiming at the space just below that.’”

One criticism of Mazda in the South African market has been the lack of an entry-level vehicle. Roberts believes that while such vehicles do have a place within the South African market, it is not part of Mazda’s strategy and product offering. As an “alternative to premium” brand in the market, quality is of the highest importance rather than the recycling of older models.

He says, “Emerging-market vehicles are vehicles in entry-level segments of the market. These products are effectively previous-generation products based on the previous generation’s R&D, platforms and engineering, and usually have older engine technology. Many of these vehicles are manufactured locally by original equipment manufacturers (OEMs) and are specific to a market. These cars certainly do have a place in emerging markets. Mazda does not have a strategy of retaining and redeveloping previous generation products, and therefore, without local manufacturing, we do not have access to these types of products. The repositioning of the Mazda brand as an ‘alternative to premium’ also does not lend itself to the development of such cars.”

As the weak economy in South Africa continues to put strain on all sectors, Mazda SA has taken the bold step to move away from sales targets and rather look to a system of objectives. While both of those strategies may seem very similar, Roberts believes that the move to trusted objectives is something which works for the brand and its dealers.

“We believe that dealer retail sales targets set by the manufacturer, or the wholesaler in Mazda SA’s case, don’t make sense. After all, who knows better than the invested dealer partner how many new vehicles they need to retail each month to have a successful business? Mazda SA selects our dealer partners based on their business plan and ‘credentials’, for example, their knowledge of the local market where they operate. This strategy has worked well for Mazda SA and continues to grow more robust as the business and dealer partnerships mature,” he adds.

South African vehicle sales figures for 2019 show that 21.4% of all sales were direct from manufacturers to the vehicle rental industry, corporate fleets, and government. Mazda SA, however, do not operate in that segment, as they feel that it damages the value of the brand in the long term—and that impacts the average vehicle owner in turn.

“From the start, Mazda SA made a strategic decision to target the private buyer in the South African vehicle market and direct all retail sales via our selected dealer partners. Many were skeptical, but this has proven to be successful for us.

“Mazda SA has a strategy of improving resale or residual values for private buyers. We believe that the sales of large volumes into rental and other large fleets is the primary reason for the negative impact on a brand’s residual values,” Roberts concludes.

There is little doubt that Mazda is on the right track to make real inroads within the sector in South Africa.

Their focus on putting the customer first through a new network of dealerships owned and operated by carefully-selected dealer partners and owners will no doubt help build trust and mend the damage the sector has taken as a whole of late—something that is bound to work in their favour. Car sales may be at their lowest levels in six years, but once the trend shows an upturn, Mazda will be very well placed to capitalise. 

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