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The all-new Mazda3, unveiled at the Los Angeles auto show.

A mouse in an industry of elephants, this little company is quietly making some of the most intriguing new cars on the market. What’s more: its vehicles are affordable, at least for now -- the company’s new chief executive plans to push Mazda up-market.

“We can be the savvy alternative against the German three [Audi, BMW and Mercedes],” said Mazda’s new president and CEO Akira Marumoto.

The all-new Mazda3 unveiled at the Los Angeles auto show makes this lofty goal seem almost reasonable. The new compact sedan and hatchback make a strong first impression. They look better than rivals both inside and out, and will be available with all-wheel drive and an ingenious supercharged hybrid motor.

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But, here’s the catch: you’ll likely need to spend around $35,000 for a fully-loaded Mazda3 with all those headline features -- approximately the cost of a basic Audi A3 or Mercedes A-Class.

“Starting with [the Mazda3] we’re going to launch new-generation products over five to six years,” Marumoto said in an interview. In 2020, Mazda will launch its first all-electric vehicle. In 2021, production of a new crossover will commence at a new factory in Alabama, established in partnership with Toyota. Also in 2021, Mazda will unveil a plug-in hybrid with a gasoline rotary engine.

The entry-level price for Mazda vehicles won’t change much, Marumoto said, but the top-end models with more luxury features will get more expensive. “I hope that our highest trim-level can compete against Audi’s entry-level grade,” he said.

Mazda has little choice. Luxury brands have moved down-market in recent years. “Mazda and other mass-market players are defending their turf as the luxury brands offer smaller vehicles,” said Robert Karwel, senior manager of the Power Information Network at J.D. Power Canada.

More than six million Mazda3s have been sold since 2003 globally, though in Canada sales have declined to 27,900 last year from an all-time peak of 50,700 in 2005. It’s the fifth bestselling compact car in this country, according to data from GoodCarBadCar.

The compact car segment is down with customers defecting to compact and sub-compact SUVs, however it’s still the third biggest segment in Canada,” Karwel said. “Mazda is looking to increase their market share and, in my opinion, that is exactly what they’re going to be do.” The original Mazda3 did just that when it replaced the Protégé in 2003. “That car looked so good it turned the segment on its ear,” Karwel explained. Mazda will be hoping the new model can repeat the original’s success.

Mazda hopes the redesigned 3 will replicate the success of the original 2003 model, which replaced the Protégé.

Not quite art

The all-new Mazda3 will arrive in showrooms in early 2019 in both sedan and hatchback form. All-wheel drive will be a big selling point. Drivers will also have a choice of engines. The 2.0-litre and 2.5-litre gasoline motors, as well as the new Skyactiv-X mild hybrid, will all be available, but the 1.5-litre and the diesel offered in Europe are unlikely to end up here. Transmissions are either a six-speed manual or automatic; the company hasn’t said yet which engines will be available with the manual, nor have prices been announced.

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The “Skyactiv-X” engine combines a supercharger, mild-hybrid system and semi-compression ignition. There’s nothing else like it. Mazda claims the new motor combines the fuel economy of a 1.5-litre diesel with the power of a 2.5-litre gasoline motor. It will make 178 horsepower.

While many brands add creases and lines to increasingly messy designs, Mazda is bucking the trend. The new 3 is all clean flowing surfaces, similar in that way to the Porsche 911.

“It’s a very unique form. You can’t find anything else like this,” said Yasutake Tsuchida, chief designer of the new Mazda3.

Yasutake Tsuchida, the chief designer of the new Mazda3.

Brendan McAleer/The Globe and Mail

It’s sculptural, if perhaps not quite rising to Mazda’s lofty “car as art” intent. The hatchback’s swollen rear wheel arch and C-pillar look like they’ve had a bit too much Botox. Combined with the tiny rear windows, over-the-shoulder visibility is like glancing out of a mail slot.

“Because our market share is less than two per cent, we don’t have to be liked by everyone,” Tsuchida said. “It’s easier for a designer working for a smaller company.” He wonders why all brands can’t make beautiful cars. It’s normal to have tension between design and engineering and accounting departments, but at Mazda everyone is apparently on the same page: “We have less fighting with each other,” he explained.

“When you think about Japanese vehicles, what you associate them with is not design, but function and inexpensiveness. From the viewpoint of a designer, that is a rather sad situation for us,” Tsuchida said.

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He sees room in the market for Mazda to become that design-focused Japanese brand. Infiniti, Lexus and Acura may beg to differ, but beautiful is not the first word that springs to mind when looking at their cars.

“Increasingly, as cars kind of get similar, style is going to play a more important role in the purchase decision, as a differentiator,” Karwel said.

The car's design favours clean, flowing lines, evocative of a Porsche 911.

Chris Carlson/The Associated Press

The future of Mazda

Edging into the luxury market is just one way Mazda will continue to survive as a small automaker. The industry relies on economies of scale. Profit margins are thin and getting thinner. Mazda sells just 1.6 million vehicles per year while Toyota and Volkswagen Group each sell more than 10 million new cars and trucks. Large brands tend to gobble up smaller ones.

Mazda can remain independent by focusing on what it’s good at, Marumoto said: internal-combustion engines, design, and vehicle architecture. “As for the remaining areas, we should collaborate or have some alliance,” he explained. Case in point: Mazda’s 50/50 partnership with Toyota on their new factory in Alabama.

With beautiful styling, Mazda is certainly delivering distinctiveness.

When it comes to electric and hybrid vehicles, Mazda is behind; it doesn’t have a single hybrid on sale yet. However, Marumoto said Mazda won’t simply license electric drivetrains from another automaker. “We are doing a joint development with suppliers, however we are not jointly developing with other OEMs,” Marumoto explained.

“Given the scale of our company, we understand that we cannot develop and manufacture everything by ourselves,” Marumoto said. “What is important for us to survive as a small manufacturer with only two per cent global share is to maintain and strengthen our uniqueness and distinctiveness.”

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Despite being a mouse among elephants, Mazda continues to break new technological ground while building cars that have a cult-following among enthusiastic drivers.

Between the Skyactiv-X engine, the upcoming revival of the rotary engine as part of a hybrid powertrain, and the beautiful design of its new vehicles, Mazda is delivering on the promise of distinctiveness. To avoid getting trampled by bigger rivals, it will need to continue to offer drivers what other brands can’t or won’t.

The writer was a guest of the automaker. Content was not subject to approval.

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