MAZDA:Framework for Medium- and Long-term Initiatives

In February 2012, Mazda announced structural reform plan to reinforce our Framework for Medium- and Long-term Initiatives, in order to address changes in external environment and ensure future growth.

Background

●Historical appreciation of yen that has persisted for a long time
●Deterioration of external environment including unstable economy in major countries due to financial crisis in Europe, the Great East Japan Earthquake, and the flood in Thailand
●Change in global automotive industry demand

◆SKYACTIV TECHNOLOGY, which is a game changer, has been launched successfully, and sales in major markets are increasing
◆Using SKYACTIV TECHNOLOGY as the product base, implement structural reform to reinforce the Framework for Medium- and Long-term Initiatives and to address the rapid environmental changes

(1) Business innovation by SKYACTIV TECHNOLOGY
(2) Accelerate further cost improvement through Monotsukuri Innovation
(3) Reinforce business in emerging countries and establish global production footprints
(4) Promote global alliances

(1) Business Innovation by SKYACTIV TECHNOLOGY

SKYACTIV TECHNOLOGY drives not only technology reforms but will also result in structural reforms of Mazda´s business itself.
Distinctive design and class-leading products based on outstanding environmental and safety performance improve brand value and become a key for Sales Method Innovation which promotes sales at the price without discounting in global markets.
In addition, SKYACTIV achieves cost improvements based on Monotsukuri Innovation to generate profits even under strong-yen environment.

- Introduce 8 models which fully adopt SKYACTIV over the next 5 years

- Increase sales mix of SKYACTIV products to 80% by fiscal year ending March 2016

(2) Accelerate Further Cost Improvement through Monotsukuri Innovation

- Project to achieve original targets for cost improvement and efficiency improvement by Monotsukuri Innovation

- Aim at improving vehicle costs by 30%

Performance

Improve Cost / Efficiency

R&D Efficiency

30% or more

Investment in Production Facilities

SKYACTIV-G

60% or more

Vehicle

20% or more

Cost Improvement

Vehicle
(excl. additional equipment)

100kg or more weight reduction
(equivalent to 5% fuel economy improvement)

20% or more

30%
(Target)

SKYACTIV-D

20% better fuel economy / Euro6 compliance

Better than current engine

SKYACTIV-G

15% better fuel economy and torque. Possible to comply with Euro6

Better than current direct-injection engine

SKYACTIV-DRIVE

4-7% better fuel economy / Direct feeling improvement

Same as current transmission

(3) Reinforce Business in Emerging Countries and Establish Global Production Footprints

- Reinforce business in emerging markets through further initiatives

China	Establish consistent production and sales framework (Change our equity in CFMA) Start local production of SKYACTIV Expand sales network for 400,000-unit sales structure (Accelerate to open outlets in in-land areas and open areas in coastal regions) Increase outlets : 365 outlets (End 2011) -> 600 outlets (End 2015, plan) Expand product line-up : local production models 6 -> 10 models
Russia	Establish local production footprints Talks are underway to establish joint production facilities with Sollers (2 local production models) Sales volume : 50,000 units or more (to be achieved by FY March 2016)
ASEAN	Local production model : 3 models (FY3/2012) -> 6 models (FY3/2016, plan) Sales volume : 55,000 units (FY3/2012) -> 150,000 units (FY3/2016, plan) Share : 2.4% (CY2011) -> 4.7% (CY2015, plan) Number of outlets : 236 outlets (End 2011) -> 330 outlets (End 2015, plan) Thailand : Studying capacity expansion at AutoAlliance (Thailand)
Central & South America	Construct vehicle and engine assembly plants in Mexico (Operation starts in FY March 2014) Strengthen sales performance in North America and Central and South America by utilizing FTA, etc. for vehicles to be produced in Mexico Studying entry into Brazilian market

- Accelerate to establish production footprints highly resistant to exchange fluctuations

- Overseas production ratio is projected to rise to 50%

(4) Promotion of Global Alliances

To reinforce Mazda Brand, strongly promote business and technology alliances

1. Actively pursue alliances for product, technology and production opportunities to increase portfolio, drive efficiencies and share expertise

2. Offer Mazda products and technologies including SKYACTIV powertrains to OEM´s for mutual benefits

	Prior		New
Operating profit	¥170 billion	->	¥150 billion
ROS	5% or more	->	6% or more
Global sales	1.7 million units	->	1.7 million units (unchanged)
*Exchange rate assumptions
US dollar : ¥90, Euro: ¥125		->	US dollar : ¥77, Euro: ¥100

5 pillars

Brand Value
Monotsukuri Innovation
Environmental and Safety Technologies
Emerging Markets
Ford Synergies