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With no launches in next 2 years, Mazda rides rough road

Automaker to fill void by pushing new fuel-efficient combustion engine

Mazda's Skyactiv-X engine is displayed during the media preview of the Tokyo Motor Show.    © Reuters

HIROSHIMA, Japan -- Mazda Motor is entering a challenging period in its product cycle, with no major launches planned until a large, high-end platform debuts in the fiscal year through March 2023.

The carmaker plans to keep making smaller improvements to existing offerings in hopes of maintaining its appeal. But buyers may still flock to competitors that fully redesign or newly launch models in the same categories.

Its new Skyactiv-X fuel-efficient engine, launched last year, will be key to weathering the drought.

Mazda last took a few years off between the 2009 full redesign of the Axela, now the Mazda3, and the 2012 introduction of the first-generation CX-5 sport utility vehicle.

The Hiroshima-based carmaker intends to start taking orders by March 2021 for the brand's first mass-produced electric vehicle, the MX-30. But not many will be built, and it will not contribute much to car sales volume, suppliers say.

Full redesigns, which require extensive investment and preparation, come only every five years or so per model. Mazda has traditionally filled the gap with improved safety and new financing arrangements.

These minor changes help dealers make their sales pitches but cannot win over shoppers already leaning toward the competition. "Yes, they do serve as a useful final nudge to persuade customers to buy," an executive at a dealership in western Japan said, "but few customers come to a dealership because they want to buy a car with minor changes."

Many Mazda customers have been drawn in by hit models released since 2012, including those in the CX SUV series. The carmaker sees the boom as a double-edged sword.

"Many of our new customers come to our stores wanting a certain model," a manager at a Mazda sales unit said. "It's not like they're fans of the Mazda brand itself, so moving to other brands is easy."

The Mazda CX-30 on display in Chiba, Japan: The model was one of the new releases of 2019.

2019 saw a full redesign of the Mazda3 and the launch of the CX-30 SUV. To close the year, Mazda began selling vehicles equipped with Skyactiv-X, which marries the best of diesel and gasoline engines to generate power and torque while reducing emissions. Mazda wants the engine to be a flag-bearer of its brand image.

Skyactiv-X has yet to deliver on the hype. Mazda says it is installed in only 4% of Mazda3s and 2% of CX-30s -- far less than the 25% to 30% it had envisioned.

The hurdle is the added price of around $6,300 compared with regular gasoline engines.

"You have to be quite a car lover to feel the difference," an executive at a sales unit said, noting that "it's hard to persuade a customer to go for the better engine."

The automaker also recommends high-octane gas for Skyactiv-X, adding to costs for the owner.

Mazda is working on a new large-vehicle architecture with a six-cylinder engine for 2023. The price is set significantly above the current lineup, with the carmaker aggressively pursuing new customers who would be interested in Toyota Motor's Lexus luxury line, for example. These buyers will demand a new level of excellence in sales and customer service as well.

Mazda does not want to resort to discounts, fearing damage to the brand. The hiatus will also serve to test its ability to attract customers on the strength of its products and services.

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