Mazda3 hybrid still not for Oz

Mazda Australia will not introduce the Mazda3 Hybrid to compete with the Corolla Hybrid, which was this week confirmed to arrive in local showrooms mid-year.

Mazda's first hybrid model was revealed at the 2013 Tokyo motor show but has been ruled out for sale outside Japan ever since, leaving Mazda without a hybrid model locally.

The petrol-electric Corolla, meantime, has been available in Europe since 2009 and will become Toyota Australia's fifth hybrid model after the Camry Hybrid, Prius, Prius c and Prius v.

The Mazda3 and Corolla have traded places as Australia's most popular new vehicle for the past few years, establishing a grudge match since eclipsing the Holden Commodore as the nation's favourite car.

Asked about the chances of seeing the Mazda3 Hybrid in local showrooms following Toyota's announcement, Mazda Australia managing director Martin Benders remained steadfast.

"If we found there was natural demand for it then we might make a case to Japan, but not at this stage," he said, pointing out that the reason for the hybrid 3's existence was the hybrid-friendly tax regime in Japan, where hybrid vehicles are top-sellers.

"In Japan, 40 per cent of the C [small-car] segment alone is hybrid, so if you're not in there with a hybrid you're selling into a much smaller piece of the pie, so that's why they're doing it in Japan.

"The only other place they would consider doing hybrid is somewhere like California, where there's some sort of support for hybrid in the form of driving or tax advantages, but even then there's probably not enough reason to justify it."

Benders said the lack of government incentives in Australia, where the vast majority of hybrid vehicles are sold to fleet buyers at wafer-thin profits, would just one reason for Mazda's lack of hybrid models here.

"In Australia, everything's on an equal footing. For example, Camry Hybrid in the medium segment is doing about 20 per cent of their total Camry volume, but out of that 20 per cent – which is about 3000 units of hybrid – only about a third of those go to private buyers.

"The rest go to taxi fleets and government fleets, which are probably heavily subsidised.

"If you add them all up it's a reasonable number but it's across a range of different cars and from our perspective it's not really natural yet, in terms of people wanting hybrids.

"A reasonably big percentage of those Camrys have gone to NGOs [not for profit organisations]. I don't know which ones they are, but I'd guess they'd be some sort of environmental organisations that need some cars that suit their image.

"I think the Victorian government agreed to buy a certain number of Camry Hybrids to support Toyota in the state, so there are always reasons for some people to buy them."

Benders said that, in line with Mazda's goal of minimising the CO2 footprint of its total 'carpark', the car-maker's models were simply too cheap and efficient to justify more expensive hybrid power.

"When you look at the fuel economy, Camry Hybrid CVT gets you 5.2L/100km, our 2.2 Mazda6 diesel gets 5.4. Diesel I know is more expensive than petrol, but then hybrid technology is more expensive than diesel.

"So Mazda's approach is that -- all things being equal, that is there are no tax advantages and so on – then we'd rather do it with the base technology if we can be competitive there, rather than add on expensive stuff like hybrid and the like, which is what we've always said."

Benders said cars were so efficient these days that the advantages of low-consumption powertrains – including diesel – reduced with the size of the vehicle.

"The smaller the car gets, the smaller the fuel economy benefit gets as well. That's the reason we didn't bring out the Mazda2 diesel and why VW stopped the Polo diesel -- because when you get down there the difference is so small the average buyer won't see the difference."

But he pointed out that many Mazdas already incorporated elements of electrification, including the Mazda6's capacitor-based brake energy regeneration system (i-ELOOP), while Mazda is also working on diesel-like compression-ignition technology for its next-generation SKYACTIV II engines.

"I-ELOOP is a little bit that way and we did say that if we go to HCCI that there could be some mild electrification for getting the car off the mark, which would basically give it electric car sort of efficiency in terms of well-to-wheel, not just tailpipe emissions."

Benders dismisses suggestions Mazda would be behind the electrification eight ball when the majority of new vehicles are eventually hybridised because it has no presence in the hybrid market.

"That's not right. We are playing in that area and that's why we've signed up with Toyota in terms of technology sharing.

"We do a lot of that stuff in the background, but we don't see that's something we need to be up front with today, given where the industry is and where consumers are.

"We're not holding our fire, but there's a difference between doing the research and testing, and actually bringing a car to market.

"My understanding is Mazda and Toyota have formed a working group that is working through a list of technologies in the areas of electrification, safety and autonomous driving, which are very expensive and so tie-ups to share the background burden make sense."

He said entering the 'stop gap' hybrid vehicle market to compete headlong with Toyota – as Hyundai will do with its all-new IONIQ hybrid makes as much sense as joining Nissan as an early-adopter in the pure-electric vehicle scene.

"People assume hybrid's going to be the answer, but there's a whole group of people that are running away doing electric cars as the solution.

"What we're saying is the car industry and the ownership cycle of cars is so slow that there's no real advantage in being at the forefront. The [Nissan] LEAF [EV], for example, sold 88 cars last year here. That's a big investment for 88 cars.

"I'm surprised [Toyota] don't do diesel hybrids and they're also having an each-way bet with that [hydrogen-powered] Mirai thing they've got. So I don't know if they believe hybrid is the ultimate solution, but they've got a lot invested in it and they've made the technology pretty seamless.

"We don't dismiss it, but from an Australian point of view we try to play where the customers are for the time being."

Unsurprisingly, the local Mazda chief said a CO2-based tax system, rather than government incentives for hybrids, was the most equitable way to drive sales of low-emission vehicles.

"Don't get me wrong. I'm not advocating government incentives – I think they try to pick a winner and drive skewed demand that ultimately can't be sustained, as shown in places like Belgium and Holland.

"To me, the best way a government can work is set their taxes based on CO2, pure and simple, whether that's through fuel or the car and whether that's tailpipe or wheel-to-well."