In January of 2016, Masahiro Moro took the helm of Mazda North American Operations (MNAO), assuming the roles of president and chief executive officer. Now, after leading a year of Mazda’s brand evolution in the United States, Moro-san sat down with the editors of Inside Mazda to discuss his perspective on the current status of the brand and his vision for Mazda’s future.
Q: How has your transition to the role of CEO been? Has it gone as expected? Any surprises?
A: Personally, it has been a year of new experiences for me. My wife and I relocated from Japan to Orange County in the first part 2016, and we’re settling in to life in Southern California. I have had the honor of attending many events for the first time with the MNAO team, even getting the opportunity to play a round of golf at Pebble Beach with U.S. business media during the Rolex Monterey Motorsports Reunion. I’ve enjoyed supporting our Mazda Motorsports team by attending races at Mazda Raceway Laguna Seca. It’s been an exciting time for me and my family.
Career-wise, my first year as the CEO of MNAO has been a lot of work, but I’ve been pleased with the positive changes taking place across the organization. This has not only been a year of change for me, but also for Mazda as we transition our lineup of cars and crossovers—and how we’re positioning them. I believe this change will make us stronger as we look to the future. I see a lot of opportunity for us a brand in the United States and I continue to be impressed by the dedication and passion of our team at Mazda.
Q: Looking back over your first year as CEO of MNAO, what are some of your proudest accomplishments?
A: That’s a hard question. I feel like there is so much to be proud of. As a company, we continue to make great vehicles. Vehicles that we can be proud to sell, vehicles that cement our corporate philosophy of Hashiru Yorokobi—or the unique feeling of exhilaration, joy and well-being that enriches owners everyday lives and makes them smile. We have proven our position as a leader in design, with the MX-5 taking home the award for World Car of the Year and World Car Design of the ear. We continue to achieve top EPA fuel-efficiency numbers with our full lineup of vehicles and we’re developing new product technologies, with our predictive i-ACTIV AWD, i-ACTIVSENSE safety technologies, G-Vectoring Control vehicle dynamics improvements and our SKYACTIV-D diesel engine that will go on sale in the CX-5.
We’ve also made some significant changes within our corporate culture that I believe will set us up for success heading into the future.
Q: If you could name one thing, what would you say is your most immediate goal as CEO of MNAO?
A: I believe that Mazda should be viewed as an experience company, not simply a car company. For that reason, I have focused my immediate priorities on delivering our “Brand Value Management” approach to our entire organization, from the employees at MNAO down to every employee of Mazda’s dealer network. Building the value of our brand from every touch point is the basis of the future success of our company.
This isn’t an entirely new goal for Mazda. It’s just a different way of approaching our ultimate goal of putting smiles on our customers’ faces. Ultimately, we seek to create relationships in which the customer feels respected and rewarded for being part of the Mazda family.
Q: So what is “Brand Value Management” and what does it mean to Mazda?
A: Brand value management puts the customer at the center of all of our business practices. Our goal is to make lifelong fans out of our customers. This approach looks at the entire customer journey—from initial research and purchase, to the customer experience with delivery, service, issue resolution and all other experiences throughout the ownership cycle, with the goal of being able to create a bond that will keep owners coming back to Mazda. Our customers should feel confident in their decision to buy a Mazda and should understand our brand. They should be our greatest advocates. We should be providing them with the best vehicles and experiences to support their advocacy.
In order to achieve this we have been taking an inside-out approach to evolve our brand. We first need to teach our employees and dealers what the brand is, including our history and philosophy behind making the vehicles we make, and why we stand firmly to our values. Just telling them that we’re moving toward a more sophisticated approach isn’t going to change their minds. We believe our renewed focus on the right customer and building a holistic customer experience is the right approach, but now we have to cascade that through every part of our business.
Q: What is Mazda’s biggest challenge as a brand? How will Brand Value Management address those challenges?
A: While our products are great, and we are moving our focus to developing a better relationship with our owners, we will have an issue with consideration and awareness of our brand. On the product side, the CX-9 as well as the CX-5 and the refreshed Mazda3 and Mazda6, are all great conversation starters to capture the attention of those we haven’t had the opportunity to reach in the past. Our next-generation product plan will lift our brand above our current mass-market competitors.
We’re always been lucky to have such great brand advocates—throughout our Mazda clubs, automotive media and fiercely loyal customers—but growing that support and validating what those owners have always known, is something that we are now focused on developing. If all we did was sell great cars, then we’d be missing the most important element: forging a relationship with our customers. We want all of our owners to love Mazda, just as so many already do.
Getting everyone in the organization on the same page can be difficult, but just as we want to have a positive experience with our customers, we see our dealer networks as customers and seek to build positive relationships with them. In general, there’s still a negative perception about going to a dealership, and we’re working directly with our dealer partners to try to change that paradigm. This is the focus of a program we’re rolling out to dealers now called “DriveBeyond.” It was designed to give our dealers the tools to better satisfy their customer experience needs. Many customers never see the difference between a manufacturer and a dealer, so if they have a bad dealer experience, they may never return to the manufacturer.
Q: Looking at the 2016 calendar year sales results, it appears as though MNAO missed sales projections in the last half of the year. Are you concerned about Mazda’s sales in the United States?
A: As part of our overall focus on brand value management, we’re no longer looking at sales volume as the ultimate indicator of our business success. Now that’s not to say that 2016 wasn’t a tough year, but it wasn’t entirely a surprise. While the numbers do matter, and always will matter, we are now more focused on quality sales of our product.
Currently, our market share sits right around 2 percent, and we’re are okay with being a 2-percent automaker, but we want to make sure that’s a quality 2 percent. Our goal is to focus on gaining customers who share similar values, what we call the UMC (U.S. Mazda Customer). We hope that by growing our customer base with customers that fit our UMC, we will see an increase in brand loyalty, and our customers will return to Mazda because of a shared passion and bond they feel with Mazda as a brand.
As we continue to make changes to our company and culture, we’ve also developed a more defined focus on residual value as it relates to brand value management. This focus steered our business away from fleet sales and incentive pricing. We will not chase sales simply for the sake of growth. Many competitors are pushing huge incentives to grow market share in a flat U.S. market, and we cannot do that. It devalues the brand and creates negative sentiment among existing customers.
We have looked closely at the cost of our vehicles and believe that our products are priced right to sell to our target customers, so there is no need to offer deep price cuts for potential customers to be interested in buying a Mazda. This shift means incentivizing quality of service over pushing cars through the doors at all costs.
Another factor that contributed to a decline is sales for 2016 was our decision to discontinue sales of the Mazda2 (in the United States) and the Mazda5 in order to start repositioning the brand. In addition, we sold down our flagship CX-9 to carry no inventory in the U.S. while we awaited the all-new 2016 model, contributing to supply shortages.
With all this said, sales growth just for the sake of expansion of sales is simply not as important for us at this point. We will continue to focus on how we can transform our business operations to deliver an experience that will result in higher customer loyalty, higher dealer loyalty, higher residual value and higher satisfaction at all levels of our business, independent from sales volume numbers.
Q: How do you plan to address the issue that customers are flocking to crossover SUVs, while trying to maintain your market position in the C-segment (compact cars)?
A: The mix of products that we bring to the U.S. market is always something we watch very closely. We identified this trend a few years ago, which is why we now have three crossover SUVs in our lineup—the CX-3, CX-5 and CX-9. At one time, our highest-selling vehicle was the Mazda3 at 45 percent of total sales in the U.S. But with the change in demand, the CX-5 is now our best-selling vehicle line.
Specific to the C-segment (compact cars) and the sales of the Mazda3, we continue to offer a best-in-class sedan and five-door model. While demand for that segment has decreased industry-wide, we will stay by our approach to not subsidize our brand—what we call our “Right Price Strategy.” We believe this will pay off in the long run. This is a shift for us, especially in this segment. As we do with our other vehicles, we will continue to focus our efforts in the C-segment on making sure we attract the right customers to Mazda vehicles.
Q: What are your goals for 2017? How will you continue to work on evolving the Mazda brand?
A: My main goal for 2017 is to continue our momentum from 2016. We will continue to focus on brand value management, further refining all of our business practices to better serve our customers as we move toward our next-generation of cars and crossovers.
We recognize that brand image exists in the minds of our customers, so we must consider every piece of our business from the customer’s point of view. My goal is to exceed expectations each and every time we interact with customers, this includes offering quality products, sales and after-sales service and communication experiences throughout the ownership cycle. The products are already headed in the right direction, with Mazda being the only automaker to have its full lineup recommended by the leading consumer advocacy publication in North America. We have to get the rest of the company caught up in that respect.
I believe empowerment starts at the management level, with us setting the tone and the standard for all our team members. It is our job to make sure they have the tools at their disposal to focus their efforts on the customer. We will focus on creating consistent customer experiences across the Mazda brand.
Just as we did when we created SKYACTIV Technology, our “Sustainable Zoom-Zoom” initiative and our award-winning KODO—Soul of Motion design, we have to find what it is about our cars that people love and continue to focus our brand on that. We realized we had to restructure and redesign every piece of our business to fit that philosophy and to make sure that every experience with Mazda is industry-leading.
ABOUT MASAHIRO MORO:
- Masahiro “Masa” Moro joined Mazda Motor Corporation in 1983.
- Moro-san was named president and CEO of Mazda North American Operations in January 2016.
- He serves as managing executive officer of Mazda Motor Corporation, carrying the title of chief marketing officer, overseeing global marketing strategy.
- Moro-san is responsible for overseeing all aspects of the company’s operations in the U.S., Mexico, Puerto Rico and the Virgin Islands, including sales, marketing, parts and service, logistics, communications, customer support and regional operations.