Design, Technology Lift Mazda in Thailand

There is a real buzz about Mazda across Southeast Asia with the brand’s sales growing fast and key models all positioned at the premium end of their market segments, allowing for higher margins.

With Japanese brands comprising more than 80% of cars sold in Thailand, Mazda’s distinctive Kodo design has been one of the key drivers in its sales surge. Deliveries were up 41.3% year-over-year through the third quarter and if sales keep rising, Mazda could breach an unprecedented 7% market share by year-end. It’s the country’s No.3 car brand (behind Toyota and Honda) and the top seller in the small-car segment.

Mazda is marketing its models in Thailand primarily through emphasizing its Kodo design language and Skyactiv technology. In leveraging the former it recently held a unique event, the “Mazda ASEAN Design Forum 2018.”

The inaugural forum outlined Mazda’s design direction and showcased two recent concepts that have been well-received globally, the RX Vision and the Vision Coupe.

It’s the first time any OEM has held an event of this kind in the Association of Southeast Asia Nations. Headline speaker was Yasushi Nakamuta, general manager-Advance Design Studio, Design Div. at Mazda in Japan.

The automaker’s design direction going forward, he said, focuses on a “less is more” concept that by “removing unnecessary elements, we are able to create perfection within the empty space.”

Nakamuta added: “We wanted to breathe life into our vehicles. Mazda combined the beauty with athletic movements in order to create vehicles with strong character. This is Mazda’s philosophy in developing automobiles for the future, using our own traditions.”

To portray the scope of Mazda’s vision of the car as an “art form,” several products designed by the OEM through Kodo principles, including a bicycle (below, left) and sofa, were displayed at the forum.

On the sidelines of the event, Mazda executives were bullish that the current growth can be both sustained and built on.

Hiroshi Inoue, managing executive officer-Asia, Oceania and Emerging Markets and president of Mazda Southeast Asia, said the automaker doesn’t offer official sales targets. But “if market trends continue,” he said, Mazda could reach 200,000 sales in ASEAN around 2023. That would be double current volumes.

Mazda’s ASEAN operation is based in Thailand and besides its main assembly plant, a joint venture shared with Ford, it has CKD operations in Vietnam and Malaysia, the latter in particular expected to see strong growth in coming years.

This year the Thai market has emerged from several years in the doldrums, with industry sales through Q3 up 20% year-on-year. Mazda has taken full advantage of customers returning to showrooms and has outperformed the overall market for several years.

Inoue sees momentum carrying into next year with the total market growing about 10%. However, he cautions that this “depends on if the election goes smoothly.” A general election is expected to be held during first-quarter 2019.

Going forward Inoue predicts the key segments that have driven growth will continue to provide a platform, notably the B-segment where the brand’s best-selling Mazda2 has been a big hit.

Inoue sees no change in demand for so-called Eco cars, which the Thai government has supported and have been the key driver in the market’s direction and growth over the past decade.

Mazda’s development of an SUV model range will be important in Thailand, but that will stem from the brand’s global strategy, which means models suited to consumers’ evolving demands will become available. Thailand thus will neatly be able to feed off the global direction.

Along with Kodo design, Skyactiv powertrain technology has connected with Thai consumers and to date, 180,000 cars featuring Kodo design and Skyactiv technology have been sold in the country. That breaks down to 110,000 units of the Mazda2, 30,000 of the Mazda3, 25,000 of the CX-5 and 15,000 of the CX-3.

Mazda will focus on sustainability in its global business strategy going forward. The automaker recently submitted a proposal to the Thai government’s Board of Investment for a taxation-incentive plan for CKD production of electric and hybrid cars, which it expects to assemble in the country in the future.

However, Mazda wants to see future EVs drawing power from low-emissions sources, with Inoue noting “80% of Thai energy comes from fossil fuels.” He points to the French model, where the country’s biggest source of electricity is from nuclear power.