To know Mazda Motor Corp. – its people, its products, its outsized place in the automotive landscape – first you must know Hiroshima, Mazda’s home and birthplace.
And so, on this cool morning, I am standing in brilliant sunshine beside a monument that represents the heart and soul of Hiroshima, an aged and broken trade hall from the 1940s that speaks to the courage and resilience of the city. I am also looking at a message to the world – a message of peace, and of reconstruction and invention. This is Hiroshima’s story. And Mazda’s.
Go back nearly 70 years, to August, 1945. As Mazda president Jujiiro Matsuda is celebrating his 70th birthday, Little Boy is exiting the bomb bay doors of the Enola Gay. In seconds, the first atomic bomb detonates 600 metres directly above the Hiroshima Prefecture Industrial Promotion Hall. The devastation is unimaginable.
Just above this spot, at the hypocentre of the A-bomb explosion, the temperature reaches 3,871 C. One mile from here, hurricane-force winds of up to 310 km/h level buildings. About 140,000 of the estimated 340,000 residents of Hiroshima eventually will die as a result -- the blast itself kills tens of thousands, more are incinerated by the raging inferno, others perish weeks later from radiation sickness.
What is now known as the A-Bomb Dome was, in 1945, an architectural landmark. Little Boy killed everyone in and around the dome, but much of the building survived. It is part of the Hiroshima Peace Memorial Park, which includes a museum that traces the history of Hiroshima from local seat of government, to military and industrial town, to A-bomb victim, to survivor. All this is central to understanding Mazda’s rise.
In 1945, Mazda was Toyo Kogyo Co. Ltd., a maker of three-wheel trucks and military hardware. Just days after the blast, the company was back building those trucks, and part of company headquarters housed the Hiroshima prefectural government.
By the middle of August, Emperor Hirohito had taken to the radio to announce Japan’s surrender, ending the Second World War. And, says Mazda Motor marketing director Mashahiro Moro today, the “determination for peace” and reconstruction had begun. In Hiroshima, that put Toyo Kogyo, and later Mazda, at the centre of a massive rebuilding effort.
Hiroshima, today a city of 1.2 million on the Seto Inland Sea, is a four-hour ride by bullet train from Tokyo. Isolated and largely alone, Hiroshima and Mazda rebuilt together. Today, Mazda accounts for about one-third of Hiroshima’s GDP.
Moro says the reconstruction of Hiroshima and the reinvention of Mazda are rooted in the local “never-give-up spirit – the spirit of Hiroshima.” As Hiroshima grew, so did Mazda. By the late 1950s, Mazda was making four-wheel vehicles. The Cosmo rotary sports car arrived in the 1960s, the RX-7 in the 1970s, the Miata/MX-5 in the 1980s – and a first win for any Japanese car company at Le Mans, in 1991.
By the early 1990s, Mazda was flying – winning races and awards. This, Mazda insiders say, led to over-confidence. Mazda envisioned an opportunity to challenge the biggest Japanese car companies, Toyota Motor and Nissan Motor. Mazda invested in a wide range of new models and technologies and set up the framework of a luxury brand to be called Amati, one to challenge Toyota’s Lexus and Nissan’s Infiniti.
All this stretched Mazda’s financial resources to the limit. And when a financial downturn arrived in the early 1990s, Mazda found itself flirting with bankruptcy. Ford Motor, a long-time partner, came to Mazda’s financial rescue, starting an ever-deepening relationship that essentially ended in 2008 because Ford needed to focus on restructuring its business to avoid insolvency at another time of financial crisis.
Today, Mazda is independent, executing a product plan with roots to 2006. You know it by the marketing term “SkyActiv” – a suite of design and technology initiatives focused on making vehicles that are efficient and entertaining to drive. Mazda’s way forward is clear – to build vehicles that “celebrate driving,” says Moro. There’s a market for them.
What Mazda in 2013 understands is that “We’re not Toyota,” says Masamichi Kogai, the CEO of Mazda Motor. Mazda is again profitable after five years of losses and the company plans to grow sales worldwide, aiming for 1.7 million by 2016.
Mazda’s recovery plan has Kogai’s fingers all over it. Before taking the top job this past summer, he was manufacturing and purchasing chief. In that role, he was central to reorganizing the company in its post-Ford days, along with penning the business plan and creating a lower cost production base so that exports could compete around the world, regardless of the value of the yen (always an issue for Mazda, which exports 70 per cent of its production from Hiroshima to 120 countries, including Canada).
Mazda, says Moro, “wants to punch above its weight.” That means fostering sales of premium vehicles without premium sticker prices.
Moro says Mazda isn’t BMW, or Audi or Mercedes, and doesn’t aspire to be. But to be successful, he says, Mazda needs to offer customers “superb value,” adding, “Mazda premium means we offer our own brand value.”
The seeds of all this, SkyActiv and such, were planted under Ford management but executed by Mazda.
Today’s product development chief, Seita Kanai, worked under Joe Bakaj, now Ford vice-president of global product development. Twice, he has taken me inside the SkyActiv push, all the way to the early days of Mazda’s effort in the late 2000s to revamp power-train technology, change manufacturing systems and redesign vehicles. Unlike Toyota and others, Mazda chose to devote scarce resources to refining internal combustion engines – both gasoline and diesel. The bet on gasoline and diesel flew in the face of what was happening in Japan. Hybrid vehicles such as the Toyota Prius and Honda Fit dominated domestic sales in Japan then and still do.
But Mazda persisted and, last year, the first full SkyActiv model – the CX-5 sport-utility vehicle – went on sale.
Worldwide sales have exceeded targets. This fall, the 2014 Mazda3 compact went on sale, also a SkyActiv model. Next year, a new plant opens in Mexico to help Mazda meet global demand for the Mazda3 and to produce the Mazda2.
In 2012, Mazda produced the fifth-most passenger cars among Japanese manufacturers, 830,000, after Toyota (3.17 million), Nissan (1.04 million), Honda (997,000) and Suzuki (897,000).
“The last five years have been tough,” says Kogai through a translator at the Tokyo Motor Show. But the emphasis on diesel and gasoline-powered vehicles before moving on to developing hybrid and battery-powered cars was the right choice. Indeed, a hybrid version of the Mazda3 is on sale in Japan, though Mazda won’t confirm it for Canada.
Kogai says Mazda is ready for growth. Attractive products and a favourable exchange rate are helping Mazda juice profits to levels not seen in more than a decade. Still, the comeback is in its infancy; nothing is guaranteed.
The new plant in Mexico must come on line. Mazda needs to forge alliances and partnerships with other auto makers to compensate for its small size. Hybrid technology, for instance, is coming from Toyota. A tie-up with Italian auto maker Fiat SpA will help Mazda deliver the new Miata roadster – in conjunction with a new Alfa Romeo sports car, too. And the yen may yet again prove a problem.
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