Mazda fights sales dip with finance and buybacks

Facing its worst annual sales performance in nearly a decade, Mazda will double-down on its private customer focus in an attempt to reverse the trend in 2020.

Sales could fall back below 100,000 sales for the first time since 2011, although Mazda will retain its position as the second-most popular brand in Australia behind Toyota.

Initiatives include the expansion of its captive finance arm Mazda Finance, while its new used-car buyback – or guaranteed future value – scheme, Mazda Assured, will be formally rolled out in the new year.

Mazda also believes the new CX-30 SUV (pictured) will not cannibalise the two models it sits between, the smaller CX-3 and larger CX-5, therefore adding to overall sales volume.

Underpinning all that, Mazda Australia managing director Vinesh Bhindi is predicting an uptick in the economy in 2020, which will in turn inject more buying confidence into the new vehicle market.

“The outlook, encouragingly, is still for slow and gradual recovery led by rebounding house prices, which generally reassure consumers of their wealth position,” predicted Bhindi at this week’s local reveal of the CX-30.

He forecast an industry-wide sales figure of 1.106 million in 2019, down eight per cent on last year’s 1.153 million sales. That in turn was down three per cent on the all-time record 1.189 million sales set in 2017.

After setting an all-time record 118,217 sales in 2017, Mazda slipped back slightly in 2017 (116,349) and more again in 2018 (111,280).

This year Bhindi hinted Mazda could drop back below 100,000 sales per annum for the first time since 2011, when it sold 88,333 vehicles.

“By the end of the year we expect to be around 100,000 sales or close to it and remain number two in the market,” he said.

Mazda’s 9.4 per cent decline from 94,246 to 85,427 sales, year-on-year to the end of October, has slightly outstripped the market. But its sales in share terms have stayed almost unchanged at 9.6 versus 9.7 per cent.

“The difference between Mazda and our major competitors is our business focusses solely on private buyers or user-chooser type consumers,” said Bhindi. “We do not have large fleet or government contract sales to soften any impact.”

Mazda Finance was announced last January. It was formed in partnership with Toyota Finance Australia Limited. More than 50 per cent of Mazda’s 140 dealers have signed on and Bhindi said more are in negotiation.

“We had our first Mazda Finance retail customer in June, which was very exciting,” said Bhindi.

“Mazda Finance allows customers a better overall experience through the whole purchase and ownership cycle and allows us to make sure the car they are in is the right one for them as they move through a life stage, or as new products are introduced to the market-place.”

While Mazda Assured hasn’t been formally announced, Bhindi has been talking about it over the last month or so. At the CX-30 reveal, he revealed a little more.

“The next step in our customer experience offering is Mazda Assured, which is essentially a guaranteed future value program,” he said.

“We know how important future value of Mazda cars is to our customers and it is an area where we have performed well in for a number of years.”

A significant number of vehicle brands on sale in Australia have their own finance arms and buyback schemes are gaining popularity. Toyota offers a guaranteed future value scheme for both new and used vehicles.

Meanwhile, Bhindi was confident the CX-30 – the fifth SUV in the local Mazda line-up – would potentially add up to 1000 sales per month to local sales volumes, taking the company back into record-setting territory.

He predicted the ongoing movement of buyers from passenger cars to SUVs would help achieve that. He also expects the CX-30 to swipe sales from rival brands.

“We think there is an opportunity to conquest sales from elsewhere,” he said.

“If you look at that small passenger car segment there has been an 18 per cent decline this year and those customers have all gone to SUVs.

“We are happy as long as they are buying our SUVs … It is important that as people move toward these vehicles Mazda has options.”

Meanwhile, the federal court action against Mazda initiated in the Federal Court by consumer watchdog the ACCC gets underway next week.