I would like to extend my gratitude to shareholders and other investors, and all of the Mazda Group's stakeholders including customers, suppliers, and local communities, for your continued support and understanding.
The automotive industry is currently experiencing the kind of transformation said to take place only once every 100 years. Reform is required in numerous areas including product planning, development, production, sales and services in order to respond to the demands of this period as represented by CASE–an acronym used to designate the new technologies of Connected technology, Autonomous driving technology, Shared services, and Electrification technology. To ensure that Mazda overcomes this time of great change, and continues to thrive and grow, we must prize Mazda’s uniqueness and co-create it together with everyone involved with Mazda.
Based on that philosophy, we announced our Medium-Term Management Policy in May 2019. As the first stage for the next 100 years, we defined three areas to focus on: investment in unique products, technologies and customer experience; curbing expenses that depreciate our brand value; and investment in areas in which we need to catch up. Since first announcing the Medium-Term Management Policy, we have developed specific initiatives and targets, which are reflected in the Medium-Term Management Plan that was announced in November 2019.
Since March 2020, global sales have fallen drastically due to stay-at-home orders, restrictions on economic activity and other similar challenges arising from the COVID-19 global outbreak. In response, we immediately implemented production adjustments to optimize our inventory. At the same time, we implemented emergency measures to curb expenses, accelerated sales in line with the recovery of demand, and were able to minimize the deterioration of cash flow. Furthermore, we had procured funds to secure liquidity on hand. We are also holding talks with local suppliers regarding their cash management and preservation of employment.
The global pandemic significantly impacted management at Mazda. However, we have learned and re-examined a great deal of things by viewing the COVID-19 pandemic as an opportunity to look back on the past, analyze the present, and contemplate the future. While aiming to optimize all costs, we are also making efforts to improve inventory quantity and quality, increase net sales, and review our cash generation capabilities through initiatives in light of what we learned. We will also pursue means to achieve greater efficiency in R&D activities and capital expenditures for future growth. Additionally, we aim to quickly get back on the track of growth by maintaining improvements to the sales quality that have been achieved so far, while achieving the growth of net sales and sales volume.
For Mazda to continue as a company, it is essential for us to reinforce “co-creation of uniqueness with others.” In order to maintain this policy, all while continuing our initiatives for the COVID-19 crisis, we will reconsider the scale and timing of the Medium-Term Management Plan’s initiatives and targets, and will also establish a business structure that is more resilient against crises.
Mazda Motor Corporation celebrated the 100th anniversary of its founding on January 30, 2020. I would like to thank our shareholders and investors, customers, dealers, suppliers, business partners and the local community who have supported us for all this time.
As we look ahead to the next 100 years, we will continue to put people first and cherish the uniqueness we co-create with others. As we strengthen co-creation with all those connected to the company, we will continue to challenge ourselves to create unique products, technologies, and experiences that our customers love.
With that in mind, I would like to ask our shareholders and investors for their continued support.
Mazda Motor Corporation
President and CEO