What’s behind Mazda’s premium push?

Vinesh Bhindi is being treated like royalty.

We’re at the launch of the Mazda CX-60 in Lisbon and the rockstar designers and engineers from MME (Mazda Motor Europe) all have an air of deference to the Fijian-born local CEO. It doesn’t normally work like this.

Usually country managers are seen as interchangeable shiny-suited salespeople, but Mazda in Australia is different. In Europe Mazda commands a 1.2 per cent market share with a 2.2 per cent claim in the US, here in Australia, however, it commands around 10 per cent of the passenger car market.

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I ask Bhindi why we’re such an outlier market and he looks at me and his eyes widen. It’s as if I’ve just asked Colonel Sanders what’s in the KFC secret recipe.

“There's not one thing in particular,” he deadpans. “Our success in Australia has been built over decades. Australia was the first country that Mazda went to outside of Japan so we've been there since 1959. Longer than the US, longer than Europe.”

It can’t be just longevity in market though. Citroën has been here since 1923 and isn’t exactly crushing it in terms of sales.

Bhindi points to three key elements that have always drawn Aussie customers to Mazda, and which are being underscored once again for a new generation of vehicles.

“When the Mazda engineers and the Mazda corporation, people talk about Mazda premium, we get excited because we know what it is. It's down to three things. It’s about the design element, and design has been a top tick for our customers in Australia for many years. Then the second part of it is the, I suppose, the engineering skills and talents.

"You experienced today how we’re making the plug-in hybrid motor work compared to some others. And then the third element is the craftsmanship part of it, the courage to use materials that are unique and different, how the interiors are put together and the effort that goes in. So all of those elements add to the success that we've experienced in Australia. It's not one little thing that I can point to.”

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Mazda’s keen to underscore its premium story with the CX-60, in effect subtly highlighting that Lexus doesn’t retain a monopoly on Japanese craftsmanship.

I ask Bhindi whether Mazda’s healthy volumes here could actually work against it when trying to weave a narrative based on premium quality.

“When we have the volume and the success we've had, we've already got many converted Mazda fans, and then to be able to give them the next level on what Mazda engineers and designers and craftsmen think is the next premium product is an amazing opportunity,” explains Bhindi.

“It’s basically giving customers something else to consider rather than saying: ‘Well, we need to go and look at another brand because there's nothing here for me: I need that next level.’ That’s what CX-60, or the large platform, will provide. The opportunity for us is around that hundred thousand vehicle sales annually in the market of about a million, putting aside all the supply challenges, because that's on everyone, assuming despite all of that, we are able to have a market of a million.”

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A push to premium is often a business model which trades off a reduction or levelling off of overall volumes in exchange for increased margins. Bhindi is quick to point out that Mazda is not abandoning those who shop at the more affordable end of its range.

“That's not how that strategy works,” he interjects when he grasps the implication of the line of questioning.

“The strategy we have is this product is an add-on, an expansion of what we have in our portfolio. So our base is already solid. And our overarching strategy is about giving customers as many options as we can. But that doesn't mean at any cost. It's got to make business sense, but we don't go in to say, we won't give that option because we can only sell a handful of those. We go in to say, well, bring it to the market and let the customers decide.

"Yes, we do all our homework before we launch it. There's a product team that does all sorts of analysis, but in the end, we bring to market with the best knowledge we have with the options we think will satisfy a broad customer base.

“Then we can always evolve that as we go on, because the customers may tell us this is really good. And we call it being a small percentage. We can always change it. And the factory is nimble enough to cater for that. Where your customers are saying they would prefer this, this, this, and this and not that, well, we'll just change it at the first opportunity to cater for it.”

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The CX-60 is the first vehicle to be launched from that particular platform and CX-70, CX-80 and CX-90 are waiting in the wings. I ask Bhindi whether he feels these products could also work for the Aussie market.

“Look, we are currently evaluating. So yes, in terms of 70, 80, and 90, we are still evaluating how that fits. The proposition is we should consider all of them and how we can make it work. So going with a yes, rather than a no, but we still have to do our homework on it. They may all work, but maybe a handful of them will work, so we'll make that call in the coming months.”

Another issue that arises with a manufacturer's push to premium is that the product can outstrip the retail environment. I ask whether Mazda is working at developing both in parallel.

“Yes, our dealers have been investing in their facilities, in their people, in their experiences for customers,” says Bhindi. “Well and truly over the last 10 or 15 years in fact. The latest round of upgrades are about to be completed, I think only a handful are pending and they're pending because building materials have become harder to get hold of, but you can see all our dealerships have upgraded their corporate signage into the new look and feel, the customer waiting areas, the cafes – they have really upgraded.”

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There’s little doubt that the CX-60, especially in range-topping Takumi trim, offers an intriguing insight into Mazda’s future design direction. Still, there remains a risk of delivering too much choice. There’s an inherent cost in bringing vehicles to Australia and, as the MX-30 experience has shown, the market analysts can get things wrong.

Mazda has turned its back on customer clinics for new cars, convinced that these processes deliver what customers think they want in the shortest of terms rather than where the market is going to be at the end of a lengthy vehicle development cycle. Bhindi’s been with Mazda for 27 years and tends to get more of these big calls right than wrong. Little wonder MME’s top brass tends to value to his opinion.