| 21 June 2024, Friday |

Mazda needs China strategy overhaul to keep up with market, CEO says

The chief executive of Japanese manufacturer Mazda Motor (7261.T) said on Friday that the country’s expanding electric vehicle market necessitates a change in direction for the company’s China operations, where it is struggling to compete against “severe” Chinese companies.

CEO Masahiro Moro told reporters during a roundtable, “The important thing is to turn the tide and introduce electric vehicles one by one.” “We have no plans to cut back.”

Moro warned that business conditions for Mazda in the world’s biggest auto market, where it has a joint venture with Chongqing Changan Automobile (000625.SZ) and China FAW, would become increasingly tough over the coming year to 18 months.

“Production output will be low for the time being while pressure on profits is increasing,” he said, adding plans to bring down fixed costs were in the works.

Moro said that during a visit to Mazda’s China unit last month, he talked through efforts with the joint venture’s management to catch up with the high speed of electrification in China’s auto market.

Mazda’s sales in China in 2022 were down 41% from the prior year to just over 108,000 vehicles, according to company data.

Its sales in China peaked in 2016 at just over 316,000 vehicles, separate industry data showed.

Mazda plans to roll out a number of EV models in China from 2025 onwards, the Asahi newspaper reported separately.

Moro was the latest executive of a major global carmaker to sound the alarm about the rapid rise of Chinese automakers.

Mazda, which is a relatively small player in China, is not the only Japanese automaker that feels the squeeze in the country.

Its best-seller in China remains the Mazda 3, according to the industry data, which also showed it trailed EV startups NIO and Xpeng in the country in 2022.

Mitsubishi Motors’ (7211.T) local joint venture with Guangzhou Automobile Group (601238.SS) on Thursday vowed to cut staff costs to try to revive its fortunes after facing slumping sales for its Outlander sport utility vehicle.

  • Reuters