Shifting the target demographic is a risky and bold move in the world of business. Not only does a company risk alienating its loyal following, there’s the bigger danger of the new market not accepting it all. That brings us neatly to Mazda.
Just a few years ago, the Hiroshima-based automaker said it plans to move upmarket and aim for the premium sector. While Mazda had made luxury cars in the past, these were mostly for the Japanese market. At the same time, those sold outside the home market weren’t exactly sales successes.
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But it seems that Mazda always had that itch to become a premium automaker. The company finally pulled the trigger a few years ago when it announced the ‘Premium Strategy’. For them, moving up to the premium, and eventually luxury, market was the only way to stay independent because of the higher profit margins. Of course, that plan attracted skepticism from some analysts.
Fast forward to 2023 and that gamble had paid off. In its most recent financial report, Mazda reported record sales and production for the first half of financial year 2024, not to mention its profits as well. By how much did Mazda grow, you ask? Let’s take a look at the figures.
Production is up by 18% from 503,000 units from the same period last year to 593,000 units. Sales shot up by 20%, rising from 514,000 units to 616,000 units, a gain of 102,000. Those are significant numbers, especially for a company that’s as fiercely independent as Mazda.
That gain of 102,000 units helped Mazda achieve net sales of ¥2.317 billion, a gain of 41%. Even more impressive is its operating income jumping from ¥55.2 billion to ¥129.6 billion, a staggering increase of 135%. As for net income, it grew by 26% from ¥85.9 billion to ¥108.1 billion.
Mazda attributes the massive growth to its new models, particularly the CX-50, CX-60, and CX-90. These models are among the first to represent the marque’s more upmarket ambitions, and has been gaining significant acceptance in markets where they are sold. It also helped that the CX-5 continues to be a strong seller for the brand.
In Japan, Mazda had sold 82,000 units (+20%) during the first half of the financial year. Meanwhile in the North America, the company shifted 184,000 units, up 38% year on year. But it’s in Europe where Mazda surprised the most. Sales went up by 90,000 units sold, a 34% increase during the same time last year. The main sales driver in the continent was Germany, shooting up by 56% at 23,000 units.
With the way things are going right now, Mazda is gunning for a sales target of 1.2 million vehicles by March 2024. It’s a tough ask, but the brand has strong momentum behind it at the moment. Either way, the folks from Hiroshima has proved that the move upmarket was, indeed, the right call.
