Mazda launches Light Car price attack, and the 'bubble' sedan is back

Mazda will launch its updated Mazda2 range this weekend with a promotional price starting at $16,990 drive-away -- a discount of about $2000 -- but the special deal could continue "indefinitely".

The price point is part of a major overhaul of the second biggest selling model in the Mazda range, which also sees the return of the baby "bubble" sedan. The last time Mazda had a sedan in the Light Car class was the 121 "bubble" sold between 1990 and 1997.

Other key changes in the Mazda2's mid-life facelift include the axing of the basic three-door hatch, and more standard equipment on the five-door hatchback models.

Stability control is now standard across the Mazda2 range. And curtain airbags are now standard on all Mazda2 models except the base model hatch -- on which they are now only a $400 option (previously an $1100 option bundled with stability control).

At the media preview of the new line-up on the Gold Coast this week, Mazda Australia managing director Doug Dickson defended the decision to leave curtain airbags as an option on its most popular model.

When asked if Mazda missed an opportunity to make a "safety statement" by making curtain airbags standard across the Mazda2 range, he told journalists: "We're in the business of selling cars, not making safety statements."

He later added: "We give customers the choice. The cost of $400 is the same or less than some other brands charge for metallic paint -- and we don't even charge for metallic paint.

"We are very proud of our safety achievements. We have made a conscious effort not to bundle safety equipment with other equipment, as some of our competitors do. We deliberately made this option affordable in the hope most buyers will take it up. Most of our competitors still do not have curtain airbags as standard. Some don't even have it as an option. And some of them don't even have anti-lock brakes."

With the new Mazda2 range, the company has been able to add more equipment while cutting prices, because it now sources its baby car from a factory in Thailand -- not Japan.

This new arrangement means the Mazda2 is not subject to an import tariff thanks to a Free Trade Agreement between Australia and Thailand. As with most imported cars, the Mazda2 previously attracted a 5 per cent import tariff.

A strong Australian dollar has also helped Mazda's cause. Over the past two years Korean car makers have typically had an advantage over other importers because the Australian dollar and the Korean Won have generally moved together.

But the Australian dollar has strengthened versus the Yen in recent months, putting Japanese makers such as Mazda in a stronger position.

Mazda Australia says it is deliberately being aggressive with the pricing of the updated Mazda2, which is currently fourth in the Light Car sales race so far this year, behind the Toyota Yaris, Hyundai Getz and Holden Barina.

"Coming out with a price like this is a pretty aggressive move," says Mazda Australia marketing manager Alastair Doak. "We asked ourselves, why not shoot our biggest weapon first and see what happens?"

Dickson says the price push was part of Mazda's plan to take a bigger slice of the Light Car class. "We mean business, Mazda2 is very important to us. This car is all about bringing new customers into the brand."

Although Mazda has dropped its cheapest three-door Mazda2 model, the new five-door undercuts it on price during the promotional phase of its launch.

Mazda says it does not expect sales to drop off as a result of the three-door being axed, because that model accounted for less than 10 per cent of Mazda2 sales, whereas the sedan could account for 20 per cent of Mazda2 sales.

Mazda says almost one-third of Mazda2 hatch buyers are young females, aged between 20 and 34.

The company says the latest generation model helped reduce the average age of Mazda2 customers from 52 years of age in 2006 to 43 years of age in 2009.

However, the addition of the Mazda2 sedan could see the average age climb again, because small sedans are typically bought by older customers.

"That's okay, because the sedan opens us up to a whole new buyer market," says Doak. "The volume is not huge but it does give us a sales opportunity. And the hatch still appeals to younger people."

When asked if Mazda feared a buyer backlash because the Mazda2 was now made in Thailand rather than Japan, Dickson said: "I'm not sure where a car is made these days matters all that much. Quality is not an issue, it really is not an issue. This factory is a brand-new factory and a lot of the parts for the car come from Japan."

When asked if a parallel could be drawn between Honda's sharp decline in sales over the past three years and the fact that more and more of its models came from Thailand, Dickson said: "I really can't speak for Honda. I've got a view about [Honda's weak sales performance in recent years] and it has nothing to do with Thailand."

He added: "If Thai-built products were a problem, how come the [Toyota] Hilux is the number two seller in this country? And some of those models are not cheap, costing between $40,000 and $50,000. People would not be buying them if they thought there was a problem with Thai-built cars."

The Mazda BT-50 pick-up is built in Thailand alongside the Ford Ranger in a joint venture factory.

The Mazda2 comes from a different, all-new factory that was built last year and will also soon build Australia-bound Ford Fiestas (the Mazda's twin under the skin).

More than 61,000 Mazda2s are on Australian roads. Mazda sold 25,000 of the boxy, first generation models in the five years from 2003 to 2007, but the latest generation Mazda2 is selling at a higher rate: 36,000 have been sold in less than three years. An all-new model is due in 2012.

Prices do not include registration and dealer charges

Country of origin: Thailand.
Engine: 1.5-litre four-cylinder.
Power: 76kW/135Nm.
Transmissions: Five-speed manual, four-speed auto.
Economy: 6.4, 6.8L/100km.
Safety: Five star ANCAP rating. Six airbags (front, side and curtains) and stability control are standard.
Rear seat: 60:40 split fold.
Boot space: 450 litres.
Spare tyre: Space saver.
Metallic paint: no extra charge
Warranty: Three years/unlimited km.

Country of origin: Japan.
Engine: 1.5-litre four-cylinder.
Power: 80kW/141Nm.
Transmissions: Five-speed manual, four-speed auto.
Economy: 6.1, 6.7L/100km.
Safety: Four star ANCAP rating in standard trim: dual airbags and stability control. Scores a five star ANCAP rating when equipped with optional side, curtain and knee airbags ($750).
Rear seat: 60:40 split fold.
Boot space: 475 litres.
Spare tyre: Full size.
Metallic paint: $300 extra.
Warranty: Three years/100,000km.

Country of origin: Korea.
Engine: 1.5-litre four-cylinder.
Power: 76kW/145Nm.
Transmissions: Five-speed manual, four-speed auto.
Economy: 7.0, 7.6L/100km.
Safety: Four star ANCAP rating. Four airbags (2 x front and 2 x front seats). Anti-lock brakes and alloy wheels are a $1190 option. Stability control and curtain airbags not available.
Rear seat: 60:40 split fold.
Boot space: 400 litres.
Spare tyre: Full size.
Metallic paint: $400 extra.
Warranty: Three years/100,000km.

Country of origin: Thailand.
Engine: 1.5-litre four-cylinder.
Power: 88kW/145Nm.
Transmissions: Five-speed manual, four-speed auto.
Economy: 6.3, 6.6L/100km.
Safety: Four star ANCAP rating. Six airbags (front, side and curtain) and anti-lock brakes are standard. Stability control not yet available.
Rear seat: 60:40 split fold.
Boot space: 506 litres.
Spare tyre: Full size.
Metallic paint: $395 extra.
Warranty: Three years/100,000km.

Country of origin: Korea.
Engine: 1.6-litre four-cylinder.
Power: 82kW/145Nm.
Transmissions: Five-speed manual, four-speed auto.
Economy: 6.8L/100km.
Safety: Four star ANCAP rating. Two airbags and anti-lock brakes are standard. Stability control coming with new model in 2011; side and curtain airbags available as an option pack ($990) for the Si model.
Rear seat: 60:40 split fold.
Boot space: 337 litres.
Spare tyre: Full size.
Metallic paint: $400 extra.
Warranty: Five years/unlimited km.

Key to pics: Mazda2 Genki hatch (blue), Mazda2 Neo hatch (green), Mazda2 Maxx hatch (orange), Mazda2 Maxx sedan (grey), Mazda2 Genki dash (manual), Mazda2 Maxx dash (auto), Mazda2 Maxx rear seat.

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