Big-six buyers on the radar for Mazda6

That old saying – the one about an ill wind – is bound to hold true for full-line importers when Australia's final two manufacturing plants close next year.

But who will be the importers enjoying that refreshing blast?

Mazda Australia MD Martin Benders hopes his brand will be one. During his presentation for the upgraded Mazda6 last week, Benders explained that in the current market there is a trend away from large cars – and it's not just large cars in the VFACTS sense of the word. Medium passenger cars that are nearly as long as a Commodore or Falcon are losing ground to smaller cars and SUVs also.

It's all part of a long-term trend towards smaller packages and a recent parallel trend to more practical family cars in the form of SUVs. Perhaps too it's a sign that what has passed for a family sedan since the late 1980s has outgrown the sweet spot for most Aussies.

"626 was our dominant sedan-based passenger car model through the eighties, and that flipped in favour of 323 in the early nineties," Benders explained.

"While we saw the start of a strong renaissance for Mazda from 2000 onwards, the explosion in the popularity of Mazda3 coincided with the small-car segment becoming the dominant segment over the past decade.

"Mazda6 and 626 have been quite stable over a long period of time, in absolute volume, but obviously as the industry has grown, the share of the industry has reduced.

"In June 2005, large and medium cars accounted for almost 50 per cent of the passenger-car market, and light and small [segments] making up the balance.

"In 2005, the Holden Commodore was the country's largest selling car – something that it had achieved for the previous nine years. And together with Falcon, in 2005, these large sedans accounted for just over 125,000 cars. That was already 16 per cent down on 2004.

"From a medium-car perspective, in 2005, the medium segment was averaging 6400 sales per month – in a market of just under a million cars.

"In 2016, medium passenger cars are averaging just under 4000 cars a month – in a market that's on track to pass 1.2 million this year.

"When you look at this year, to the end of August, large cars have accounted for 26,000 units, which is only 3.9 per cent of the industry... compared with medium sales at 47,000 or six per cent.

"So the market continues to evolve."

In recent history, large-car sales have been ravaged by skyrocketing petrol prices and fleet purchasing criteria that overnight precluded six-cylinder cars. But four-cylinder mid-sized passenger cars haven't picked up the slack. Quite simply, former passenger-car buyers are moving to SUVs.

"Now it's looking like SUVs might even pip passenger cars within the next 12 months or so," Benders said.

CX-3, CX-5 and CX-9 account for 40 per cent of Mazda's sales, Benders revealed. Passenger cars cumulatively account for 48 per cent and the BT-50 pick-up makes up the remaining 12 per cent.

"There's been a downsizing – from larger to smaller cars, concurrently with a move into SUVs, which offer pragmatic packaging, even in a smaller overall size vehicle."

Mazda6 has been the second-most popular car in the medium passenger segment for the 13 of the past 14 years.

"Obviously Camry is the big elephant in the room here, very significant, but it has achieved [segment leadership] on very sharp pricing out of its local production facility. I'm really not sure what happens when that closes down."

So there's a chink in Toyota's armour once the Altona plant closes down. With the Aussie dollar at around 75 cents US, Toyota may not be as competitive with an imported Camry as it has been with the locally-manufactured car – other than that period when the Australian currency was up around or above parity with the greenback.

"I don't know whether Camry can sustain the [sales] volumes that they do, with an imported vehicle, because I don't know that they can get price as sharp as they have. There have been times when Camry's priced against Mazda3 and Corolla more than other medium cars."

But that doesn't mean that Mazda is going to get down and dirty selling Mazda6 to rental fleets. Any plan for the mid-size model seems to be contingent on profit as well.

"The premiums are coming down, to meet the non-premiums, so we should really go up and meet them half-way," Benders offered.

"For a business buyer, where cost is an issue, we can offer a Mazda6 top-spec, which, like for like, is significantly less expensive in total cost of ownership...

"We'll see how far their brand... badge preference goes when reality comes to the fore."

With a fairly generous equipment list and the combination of advanced drivetrain technology, reasonable driveability and respectable quality, the Mazda6 has real potential to undercut prestige brands that are moving downmarket.

"For us, Mazda6 still plays somewhat of a flagship role for our brand – and will continue to do so through into the next cycle," Benders continued.

But he admitted that while Mazda6's share of the medium passenger segment has held steady at around 20 per cent, that's 20 per cent of a declining market for private buyers (Mazda's target demographic), and Mazda6 sales have dropped away as a consequence.

For the full year 2006, the Mazda6 sold 12,826 cars in Australia. Every year since, the sales volume for the '6' has been lower than for the previous year, other than 2012, when the introduction of the current generation of Mazda6 lifted sales from 5794 in 2011 to 6558. But in 2013 the sales decline recommenced. Last year, the Mazda6 sold 5276 cars. With just four months of the year remaining, the Mazda6 has sold as few as 3009 cars, which is over 600 fewer than the same period in 2015.

The loss to Mazda6 has been a gain for Mazda3 and the two volume-selling SUVs in the range, the CX-3 and CX-5.

"Many private buyers have been converted to fleet buyers, if you like, or have moved to mid-size SUVs," Benders observed.

"Moving into 'fleet' is on the back of car allowances and novated leases and the like, where people have not been given their car with their job; they've been told they can go buy their own car.

"So we've got a job to do, to better engage with business to ensure that Mazda6 gets on their shopping lists."

Benders sees an 'opportunity' for the Mazda6 in the lower premium (just above $60,000) car buyers already mentioned and 'die-hard' large-car owners. The latter will soon have no purchasing option other than an imported front-wheel drive car from the brands they have previously supported by buying the locally-manufactured Falcon and Commodore. Once Falcon and Commodore are gone, brand loyalty or large-car aspiration will cease to be much of a factor in the new-car purchasing decision. And the Mazda6 is the car most likely to benefit from that, Benders suggests.

The Mazda boss admitted later in a Q&A session that this shift of focus for Mazda was a "longer-term process", but also said: "we're well engaged and moving in that direction".

Benders also insinuated that owners of large, six-cylinder cars might be tempted by a diesel Mazda6, with similar power delivery characteristics and better fuel economy.

"Where we have to convert those people is people coming out of the six-cylinder cars... and sort of say: 'this is another option'."

"The die-hard people are going to try and buy the last [Falcon or Commodore]... [but] some people are moving across, looking for a brand that will be offering what they want later on.

"I don't think your Commodore and Falcon buyers really know what they're going to be buying tomorrow... yet.

"Even though Holden's talking about Insignia, I don't think it's got a groundswell yet. Insignia is available now, and Mondeo's available now, but I don't think [the buyers have] made that connection..."

Mazda Australia's National Marketing Manager, Alistair Doak, offered his view that conquesting former large-car owners was not only a possibility, but the brand's small-car offering had already been achieving exactly that end.

"That change of preference in the market has actually been happening for quite some time," he said, "so if you look at the success of Mazda3... the biggest inflow of customers over the last five to eight years has actually come out of large cars... Commodore in particular."

Footnote: Other than where specifically mentioned, all reference in this story to the medium passenger car segment applies to the non-premium segment, below $60,000.