Continuing to Tackle Challenges
Envisioning Cars Existing Sustainably
with the Earth and Society
President and CEO
Mazda Motor Corporation
Q What progress did Mazda make in the fiscal year ended March 31, 2015?
Achieved steady growth though the Structural Reform Plan
Although FY March 2015 saw a drop in crude oil prices, slowdowns in emerging market economies, and unstable foreign exchange markets, the Mazda Group was able to achieve steady growth through the Structural Reform Plan*1, by offering attractive, uniquely Mazda products and services and establishing a global production footprint.
We introduced to the market two new-generation models featuring the full range of SKYACTIV TECHNOLOGY and Mazda’s new design theme, KODO—Soul of Motion. These are the new Demio/Mazda2 and the new CX-3 compact crossover SUV, and both are enjoying high acclaim in Japan as well as overseas. In FY March 2015, the ratio of SKYACTIV models increased to 74%, helping us boost profitability, enhance the Mazda brand, raise the average fuel economy of Mazda vehicles, and gain recognition for the excellent safety performance of our vehicles. The ratio of SKYACTIV models is expected to exceed 85% in FY March 2016.
At our Mexico plant, which started mass production of vehicles in January 2014, an engine machining factory came into operation in October in the same year. Mazda’s new powertrain plant in Thailand started turning out new automatic transmissions in January 2015. An engine plant located on an adjacent site is also due to begin mass production in the third quarter of FY March 2016.
*1 The Structural Reform Plan consists of the following four initiatives: 1. Business innovation by SKYACTIV TECHNOLOGY; 2. Accelerate further cost improvement through Monotsukuri Innovation; 3. Reinforce business in emerging countries and establish a global production footprint; and 4. Promote global alliances.
Q What kind of plan is the Structural Reform Stage 2, which Mazda announced recently?
Driving the four key initiatives to achieve the forecasted financial targets for FY March 2019
In April 2015, we announced our new medium-term business plan, Structural Reform Stage 2, covering the period from FY March 2017 to FY March 2019. To date, we have steadily implemented the major initiatives under the Structural Reform Plan, however, we recognize that there is still room for further improvement in the efficiency and effectiveness of each area. With a focus on further strengthening these aspects, we will move forward with the Structural Reform Stage 2. In line with this new plan, while aiming at steady volume growth, we will pursue brand value improvement through qualitative growth in the areas of product, sales, production and finance, carefully observing industry demand trends by market and segment in each region, market trends such as foreign exchange rates and oil prices, and the business environment such as environmental regulations.
Q What is brand value-focused management?
Striving to enhance both our product and corporate brand value, while emphasizing dialogue with our stakeholders
Since 2013, Mazda has promoted brand value management in earnest. While emphasizing dialogue with customers and other stakeholders, the Company has been striving to enhance the value of Mazda products and the cooperate brand value of the entire Mazda Group. To promote our brand value management, we stipulated Mazda’s Brand Philosophy, which lays out our ideal state and future vision, and disseminated it to all employees starting in July 2013. We consider the Brand Philosophy to be the essential concept in advancing the Structural Reform Plan and the Structural Reform Stage 2. Incorporating the ideas of various stakeholders, the Brand Philosophy was culminated into Mazda’s new Corporate Vision in April 2015.
It is important to ensure that individual Mazda Group employees are committed to enhancing brand value through their daily work based on the new Corporate Vision. We will continue to hold discussions regarding this vision as part of training programs in which all Group employees participate. In conjunction with these activities, we began reviewing the key areas of CSR initiatives. While incorporating the viewpoints of stakeholders outside the Company, we are identifying the challenges that the Mazda Group should address. Going forward, we plan to reflect the redesigned key areas of CSR initiatives both in the CSR targets, and the Mazda Green Plan 2020 mid-term environmental plan, with which we have conventionally implemented the PDCA (plan-do-check-act) cycle.
Structural Reform Stage 2
(Note 1) GEN1 stands for SKYACTIV Generation 1 and GEN2 stands for SKYACTIV Generation 2.
(Note 2) Direction for further growth for the next mid-term plan (from the March 2020 fiscal year) that will follow Structural Reform Stage 2 will be made during the period covered by Structural Reform Stage 2, based on changes in the business environment.
March 2019 Financial Target
*Foreign exchange rate assumptions: ¥12O/USD, ¥130/Euro
Q What is the relationship between Mazda’s business and the earth and society, and what does Mazda do for both of these?
Contributing to a sustainable society through environmental and safety technological innovation
I am aware that while brightening people’s lives through car ownership, Mazda’s business is related to, and has impact on, the challenges confronting our society--above all, global warming, energy and resource shortages, and traffic accidents.
To address these challenges, Mazda announced “Sustainable Zoom-Zoom,” its long-term vision for technology development. The basic policy of the vision is to “provide all customers who purchase Mazda vehicles with driving pleasure as well as outstanding environmental and safety performance.” We undertake a variety of initiatives in keeping with this vision.
On the environmental front, we have set goals of raising the average fuel economy of all Mazda vehicles by 30% compared with 2008 levels by 2015, and by 50% by 2020. To realize these goals, we are seeking to achieve comprehensive improvements in the base technologies, such as improving the engine’s thermal efficiency and reducing the weight of the vehicle body. Mazda will contribute toward reducing global CO2 emissions and energy conservation by delivering vehicles with excellent environmental performance at affordable prices to customers worldwide, including emerging countries, which may lack special infrastructure.
In the realm of safety, we pursue research and development in line with Mazda’s safety philosophy, Mazda Proactive Safety, to contribute toward reducing traffic accidents through vehicle engineering. While trusting and respecting customers driving a Mazda vehicle, we aim to support them in recognizing potential hazards and exercising good judgment. Mazda continues to develop and offer a range of technologies that help to prevent or reduce the damage resulting from an accident.
Q How does Mazda conduct business in regions with different cultures and practices?
Promoting initiatives to grow our Company together with local communities and business partners
Mazda conducts sales activities in more than 120 countries and regions, and has production sites in ten countries around the world. Following the basic approach of growing with local communities in the countries and regions where we operate, we attach importance to working in collaboration with our business partners, such as suppliers and dealers, to address the issues of local communities and to meet the expectations and demands of stakeholders. Our efforts will include wider introduction of our environmental management system, human resource development that values diversity, high quality maintenance, respect for human rights, and social contributions to local communities.
We understand that the roles and responsibilities that Mazda must fulfill will further expand worldwide in the future with continued globalization. Mazda will increase the use of overseas plants, while continuing to sustain an 850 thousand-unit production level at its production sites in Hiroshima and Yamaguchi Prefectures in Japan, and maintain the associated employment in the region. We are establishing a production system in which human resources in each region play a leading role, by applying our assets accumulated in Japan to global production sites. Among these assets are Monotsukuri (development and manufacturing) processes and techniques that Mazda has cultivated together with suppliers, safety and health management methods, as well as purchasing and logistics initiatives.
Q President Kogai, what message do you have for your stakeholders?
We will contribute to the resolution of social challenges by conducting business initiatives with integrity
In my office, a work of calligraphy by Tsuneji Matsuda, our third president, hangs on the wall. It says “A true patriot shines light into dark corners.” I believe that this phrase, originally derived from Chinese classical literature, means that each of us can becomes figure who contributes to nation, by doing our best to fulfill our respective roles and responsibilities.
This also holds true for our Company. I believe that, even though Mazda may not be a large automobile maker, we can benefit our stakeholders and contribute to resolving social challenges by carrying out each individual task with integrity, through more effective use of limited resources using a strategy of “choose wisely and maintain focus.”
I hope that in the future Mazda will continue to be fully recognized as a company that earns the sincere trust of all its stakeholders around the world. To this end, I will intensify the concerted efforts of all Mazda Group companies. Envisioning cars existing sustainably with the earth and society, we will continue to tackle challenges we face.
Masamichi KogaiRepresentative Director
President and CEO
Mazda Motor Corporation