Behind the badge: Doug Dickson, Mazda

Mazda Australia managing director Doug Dickson has the air of a military man about him. Tall and ruddy with a balding pate and a grey-flecked moustache, it’s easy to imagine him in the sky-blue uniform of the RAAF, instead of the business-spec suit and tie in which he sits across the table from me.  

We’re in the boardroom at Mazda Australia’s head office in suburban Mount Waverley, south-east of Melbourne’s CBD. The glass-walled room is dominated by a large oval-shaped conference table that’s hemmed by a dozen or so chrome-leather chairs. A pair of 65-inch flat-screen televisions stares mutely from one wall.  

Dickson settles his lanky frame more comfortably into the chair, making idle chatter in the soft, soothing tones of a priest. To his rivals in the auto industry, however, the aforementioned military metaphor is probably more appropriate.

Under Doug Dickson’s watch Mazda has taken no prisoners on its decade-long march to the top of the Australian sales charts. In 2011 Mazda was the fourth best selling brand in the country, its 88,333 sales representing an impressive 8.8 per cent market share, behind such heavyweights as Toyota, Holden and Ford.

These figures also earned Mazda’s Australian franchise the honour of having the highest market share of any Mazda operation in the world. This, despite the fact Australia ranks fourth behind Japan, the USA and Europe in overall sales.

Fully 46 per cent of that figure, or 41,429 cars, can be attributed to the compact Mazda3, which not only dominated the small car category again in 2011 but also ended the Holden Commodore’s 15-year reign as Australia’s best selling car.

In the 1950s, Japan was busy building up its export
potential after the ravages of WWII. One of the many initiatives
trialled was for regional areas, such as Hiroshima Prefecture, to hire a
ship and outfit it as floating trade shows for the region’s
manufacturers.  These ships, carrying exhibits of machine parts,
irrigation components, motor cars, motorcycles and more, travelled the
world.

It was on one such floating trade ship that the first
ever Mazda motor vehicle came to Australia and, as a result, a small
number of Mazda three-wheeler trucks were imported to Australia from
Japan in October 1959.
 
In 1961, Mazda’s first four-door car,
the R360 Coupe, was imported to Australia for testing in local
conditions and, after a successful showing at the Tokyo Motor Show, the
decision was made to import more the following year.

But it
wasn’t until 1964, when the first real commercial quantities of about
800 Familia sedans and wagons, along with B1600 Proceed utilities
arrived, that Mazda emerged as a volume brand on the Australian market.

In
those days there were about five different state distributors including
Westco Motors, which had the franchise for NSW, Qld and the NT, and
which Doug Dickson joined on the finance side in 1978.

One of his first roles was to oversee the purchase by Westco of the WA and SA franchises, forming what became known as GWA.

By
1981 Dickson was running GWA but by 1987 the company was in financial
trouble following the floating of the Australian dollar. This eventually
led to GWA being bought out by the factory, creating Mazda Australia as
we know it today.

In 2010, it ranked 16th out of 37 brands, with production of 1,307,540 units, meaning it made more cars than Mitsubishi but less than BMW. In its Japanese home market Mazda ranks fifth out of the six domestic car makers. So it’s fair to say the brand’s YTD 2012 top-three ranking in Australian new vehicle sales is a case of the local division punching well above its weight.

Doug Dickson acknowledges the accolade graciously, but makes the point that, much in the vein of ‘overnight singing sensations’ who spend years playing pubs and clubs before their ‘big break’, the brand’s Aussie growth spurt has been a decade in the making.

“For the last 10 years our annualised growth rate has been 10 per cent per year, or just over 11 per cent if you take it back to the year 2000,” Dickson explains.

He’s clearly a man who’s comfortable in the world of numbers, rattling off statistics with the ease of a financial controller, which is precisely where his Mazda journey began more than three decades ago (see breakout).   

In a world where CEOs and MDs seem to hop from one corporate lily pad to another with relentless regularity, Doug Dickson has stayed unerringly faithful to this one brand.

The years spent working his way up through the organisation have endowed the Mazda MD with a unique perspective: he’s seen the highs and the lows, and knows well enough that success right now doesn’t necessarily mean success in the future.

“It’s the second time we’ve had a big sales increase. If we go back to when Mazda first started, we actually reached our first peak in 1974. We did 43,000 vehicles and 7.4 per cent share and we didn’t actually beat the sales amount until the mid 2000s... We didn’t beat the market share until 2007,” he says.

Mazda went through what Dickson describes as “an enormous increase first up,” following the launch of its first volume cars here in 1964, “on the basis of being cheap and cheerful, good quality but nothing special in terms of the cars.”

After two decades of good growth the brakes came on hard in the mid 1980s with the one-two punch of the deregulated Aussie dollar in December 1983 and the introduction of unleaded fuel in July 1985.

Prices were increasing practically every month thanks to the floating dollar and the then independent distributor, GWA, was losing money hand over fist. Buyers headed for the hills and in Dickson’s own words Mazda went through “a bit of a brand crisis”.

The University of Queensland commerce graduate had arrived at GWA as a financial controller, but by mid-1986 times had become so tough “they basically decided to hand the franchise back to the factory,” and he went with it.

“In ’87 we got down to our worst year ever, which was thirteen-and-a-half thousand (units) and, by coincidence, that was the first year that I was national sales manager. So I have in fact presided over the worst and the best,” he says with a broad grin.

“That was quite a shock to the system and we really had to make a big change to the way we saw our business. We couldn’t be cheap and cheerful anymore, we weren’t attractive to fleets, so we decided that we really had to change the way we looked.”

Dickson says it was his predecessor, then Mazda Australia managing director Malcolm Gough, who first articulated a new direction for the brand.   

“We said that we had to be a lot more focused on customer service. We had to become focused on the private buyer. We had to reduce our dealer numbers and had to make certain that the dealers engaged with the new ‘brand promise’.”

The first thing Gough and his team did was reduce dealer numbers from around 165 to 120. They then had to ask the dealers that were staying on to invest heavily in new facilities, despite the dismal sales.

The carrot was some exciting new product in the pipeline, including the V6-powered Mazda 626 of 1991, the pop-up headlamp Astina, rotary-powered RX-7 sportscar and the ill-fated but adventurously styled Eunos range.

Dickson describes this pioneering wave of Mazda cars as effectively the first to embrace Zoom-Zoom attributes, long before the catchy marketing mantra had been conceived.

“If you go back to the products from the early 1990s the DNA that came to be known as Zoom-Zoom was there -- distinctive and attractive styling, a bias to performance, handling and a lively feel,” he said.

Together, this wave of product lifted Mazda’s market share from 3 per cent to around 5 per cent by the mid 1990ss. But just as things were gathering momentum in Australia, the wheels were falling off in Japan as its hyper-inflated bubble economy burst.

In the ensuing financial crisis, Mazda found itself increasingly under the control of Ford, which had held a stake in the Hiroshima-based car maker since 1979, and which by 1996 held a controlling interest. Ford’s bean counters called an immediate halt to vehicle development and effectively dictated a generation of less stylish and exciting products, as exemplified by the boxy 121 Metro.

“They were very difficult products to sell, given that we’d had such stylish products in the 10 years beforehand. Our sales basically stagnated but our market share fell back down again to about 3 per cent,” said Dickson.

But while Ford may have played its part in dictating the Generation That Style Forgot, it also played a vital role in the coming renaissance.

In 1998 a breath of fresh air arrived at Mazda’s helm in the shape of 38-year-old Ford wunderkind Mark Fields. At the time, Fields was the youngest person to head a major Japanese company. More importantly, he came with a brief to restart Mazda’s product development and marketing process.

“He was the guy that put together the Zoom-Zoom products and the Zoom-Zoom marketing theme,” says Dickson.

This first vehicle to debut Field’s new Zoom-Zoom mantra was the 2001 Mazda Tribute SUV. But for many people it is the Mazda6 of 2002 that marks the start of Mazda as we know it today.   

The Tribute and Mazda6 were followed by a wave of exciting new models including the 2003 Mazda2, 2004 Mazda3, and the CX-7 and CX-9 SUVs in 2006 and 2007 respectively. Earlier this year, Mazda added a third player to its SUV portfolio in the shape of the CX-5, which is already leading its segment with a barnstorming 1413 sales in April.

By any standard it has been an amazing run of hits, with practically every model since 2002 achieving critical acclaim and delivering the sort of upward sales trajectory most car companies MDs can only dream of. 

Dickson attributes Mazda’s second wave of success in Australia to three key elements: a professional and engaged dealer body, good product, and good marketing.

He believes Mazda was “lucky” to have had its brand crisis back in 1987, and says the wisdom of shifting away from “cheap and cheerful” to what he calls a “cut above brand position” has been well and truly validated.      

Of course, given such strong growth over the past decade, maintaining the momentum is a particular challenge. On that front Dickson concedes Mazda’s growth rate “will come back a little bit” in the future but believes it will settle at around 10 per cent market share.

Of the 2012 Australian new car market in general, he forecasts growth of around 5 per cent over 2011, to a total of 1.06 million units. Mazda in turn should increase its overall sales to 95,000-plus, on the back of better supply of the BT50 ute from Thailand and the success of its new CX-5 softroader, said Dickson.  

One of the keys to continued growth is competing in more market segments and Dickson says the brand currently competes in only 79 per cent of the market, so believes there are still gaps in the product portfolio.  

Quite how those gaps might be filled isn’t open for discussion, but what is clear is that it won’t be hybrids or electric vehicles, at least not in Australia. The Mazda MD acknowledges the company will have hybrids and EVs in its global model range in the near future, but adds “they’re going to go to the countries where there is a real need”.

Right now Dickson sees no real government or political will to encourage the use of electric cars in Australia, just as “there is no will from the government at this stage to significantly change people’s view about fuel economy.”

“That being said all manufacturers are now moving towards fuel-efficient cars and of course our contribution is the SkyActiv technologies, which give hybrid-like economy at a non-hybrid price,” he said.  

Mazda currently has its full SKYACTIV technology available only in the new CX-5, with a modified version known colloquially as ‘SKYACTIV Lite’ available in a single Mazda3 model. The company plans to eventually extend the technology to all models, with the 2013 Mazda6 to be next.

Dickson is confident that SKYACTIV delivers sufficient benefits in fuel economy to “satisfy most Australian buyers”, adding that there is “a lot more room to continue developing the technology”.  

As our interview draws to close I suggest to Dickson that he must spend an awful lot of time in the air, shuffling between Melbourne and Hiroshima.  

He shakes his head and points to the giant Panasonic television screens on the wall and the video conferencing technology dotted about the table, saying with a grin: “They leave us to our own devices.”

“We do a lot of video conferencing. I go up there probably once a year for budget discussions.”  

It’s a remarkable vote of confidence in Dickson and his team, particularly given the reputation Japanese companies have for micro-managing their offshore operations. But with a decade of 10 per cent growth behind them and their 2012 share sitting at 10.1 per cent, it’s easy to understand why Hiroshima would take a ‘hands off’ approach to its outstanding Australian operation.

Certainly Mazda Australia’s performance flies in the face of Mazda Motor Corporation’s108 billion yen ($A1.29 billion) net loss for the 2012 Japanese financial year.

Feeling lucky, I ask Dixon what percentage of Mazda’s overall revenues his Australian operation kicks in.

 “Let’s say that we are favourably received when we go to Japan,” he replies with a knowing smile.

LOSS LEADER
Just weeks after our interview with Mazda Australia
managing director Doug Dickson, Mazda Motor Corporation posted a 108
billion yen ($A1.29 billion) net loss for the Japanese financial year.

It
was the company’s worst result in over a decade and followed a 60
billion yen (A$716 million) loss in the 2011 financial year.

Analysts
attribute the poor performance to the strength of the yen and the fact
Mazda relies so heavily on production in Japan. The company still
manufactures in Japan around 70 per cent, or 813,302 of the 1,165,591
vehicles it made worldwide in 2011. Tellingly, some 80 per cent of that
Japanese production is eventually exported.

Local boss Dickson
says there’s now a pressing need to move more production offshore, just
as rivals including Toyota, Nissan and Honda have done. Doing so will
reduce Mazda’s exposure to the expensive Japanese labour market and the
strong yen, he says.

On the flip side, Mazda Motor Corporation
believes that a 7.5 per cent increase in global sales in the 2013
financial year will push it back into the black, forecasting a 10
billion yen (A$119 million) profit. 

PRIVATE DICKSON
Given his wing commander looks, it’s perhaps not
entirely surprising that delving into Doug Dixon’s private life reveals
some recurring military themes.

He reads widely on anything that
relates to military history, with a particular fascination for WWI and
WWII. His favourite film is Saving Private Ryan, and his hero is one of
the US military’s greatest leaders, General George S Patton. Oh and he
likes classical music, presumably of the rousing martial type.    

What
is surprising is that there’s no identifiable military connection in
Dickson’s family life. Born in Sydney in 1948 Dickson’s family moved to
the UK when he was three so that his father, a doctor, could finish his
ear-nose-and-throat specialty.

By the time he was nine the
family had moved to Toowoomba where he studied at Toowoomba Grammar
until graduating at the end of 1966.

Dickson moved to Brisbane
in 1967 to study Commerce at the University of Queensland, graduating in
1971 and, by 1978 had joined Westco Motors, which held the import
rights for Mazda in Qld, NSW and the NT.

Westco eventually
expanded to swallow up the SA and WA Mazda importers, creating GWA,
which Dickson was running in his capacity as company secretary by
1981.    

The Commonwealth’s decision to float the Australian
dollar in 1986 sent the local currency into freefall against the yen,
the ensuing price rises effectively torpedoing GWA’s business model. As a
result the company was bought out by the Melbourne-based factory-owned
operation in 1987.

Dickson went with the goods and chattels,
moving to Melbourne as national sales manager, before taking over as
managing director from Malcolm Gough in 2004.

He professes to a
“deep interest in anything mechanical, anything you can fix with a
soldering iron, or a spanner or a screwdriver”, and relaxes by “getting
into his workshop and tinkering with electronics, woodwork or cars.”

Dickson’s
even restored a number of cars from the ground up, including an MGA
which he subsequently sold to put carpet in his first house, and a 1930
Whippet which he admits doesn’t see much use.

His preferred ride from the current Mazda range would be a CX-5 or a BT50 Ute… except he’s not allowed to have one.

Ironically,
Dickson’s own policy states that no Mazda Australia staff member can
have as their personal vehicle a car for which there is a waiting list.
So, he waits.

It’s a good example of the Mazda Australia MD walking the walk of always putting the customer first.