Management Policy

Top Message

Coexistence of Earth, Society, and People through Cars

As set out in our Corporate Vision, Mazda aims for the coexistence of earth, society, and people through cars. We aspire to protect our beautiful planet, create a society that offers safety and peace of mind, and through cars provide social value to all in the form of health, convenience, and vibrant daily lives. To achieve this goal, we will continue taking on the challenge of creating value unique to Mazda, with a focus on “co-creation of uniqueness with others.”

1. Fiscal Year Ended March 2021 Initiatives

Reinforcement of Business Structure by Accelerating Structural Reforms and Steadily Making Improvements

In the fiscal year ended March 2021, the business environment was uncertain due to the unprecedented spread of COVID-19. As such, we were unable to formulate full-year targets at the beginning of the fiscal year and announced our full-year forecast as an operating loss of ¥40.0 billion in July 2020.

  To overcome this crisis, we further accelerated the cross-functional structural reforms that we have been promoting thus far, and will continue to do so. In all regions and all domains, we have been endeavoring to increase work efficiency and optimize our fixed costs through measures against structural issues that extend beyond individual divisions. In addition, by improving variable profits through initiatives including continuous control of sales incentives, we have striven to lower the break-even volume.

  Consequently, results for the fiscal year ended March 2021 vastly exceeded our forecast announced in July, and we were able to achieve ¥8.8 billion in operating income. In terms of quarterly trends, operating income recovered to ¥61.7 billion and the operating income ratio rose to 3.5% in the second half. The operating income ratio increased to 4.4% in the fourth quarter as the company’s earning power has improved.

  While securing liquidity on hand due to emergency procurement of funds during the crisis, free cash flow, which was negative during the previous fiscal year, recovered to a positive ¥41.2 billion. Furthermore, the equity ratio stood at 41% thanks to a strengthened balance sheet.

Fiscal Year Ended March 2021 Performance by Quarter

2. Forecast for Fiscal Year Ending March 2022

Bolstering of Initiatives to Maximize Profits

In the fiscal year ending March 2022, operating income is expected to reach ¥65.0 billion and net income attributable to owners of the parent is predicted to come to ¥35.0 billion. Due to factors such as the emergence of the Delta variant, COVID-19 is yet to be brought under control around the world and infections are spreading in emerging nations, such as in Southeast Asia. The outlook also remains uncertain in regard to the shortage of semiconductors as well as increasing raw material prices.

  Based on these issues, while taking into account assumed risks, we set our target for operating income at ¥65.0 billion. To ensure we achieve this target, we are enacting various responses group-wide with the aim of minimizing the potential impact of said risks. As production is expected to be unstable due to a shortage in the supply of semiconductors, we are carrying out rapid and flexible production and efficiently utilizing global inventories while monitoring the production, sales, and inventory levels in key countries of operation on a weekly basis. For example, Mazda is striving to maximize sales volume and profit by prioritizing the supply of products to markets experiencing strong demand due to economic recovery, such as the U.S. We will also continue to improve variable profit through efforts to reduce costs and optimize fixed costs, with a view to continue lowering the break-even volume.

  For the fiscal year ended March 2021, we forwent a dividend payout after giving full consideration to the company’s financial results for the fiscal year and its financial position. For the fiscal year ending March 2022, we plan to pay a full-year dividend of ¥15 per share.

3. Medium-Term Management Plan Revision

Partial Revision of Policies and Initiatives as a Response to Changes in the Business Environment

We are promoting our Medium-Term Management Plan, which places “co-creation of uniqueness with others” in our Management Policy. In view of the changes in the business environment due to factors such as the impact of the COVID-19 crisis, the tightening and acceleration of environmental regulations, and the race to create new value in the CASE* era, we have extended the plan by one year, to the fiscal year ending March 2026, while maintaining key management targets. In addition, we have set a new target to lower our break-even volume to under one million units with the aim of transitioning to a lean management structure capable of overcoming crises.

  In response to the major changes of the era, we will begin to invest in new domains, especially in response to CASE, particularly regarding the acceleration and expansion of electrification and the transition to carbon neutrality.

* CASE: an acronym used to designate the new technologies of Connected technology, Autonomous driving technology, Shared services, and Electrification technology.

4. Initiatives for Carbon Neutrality

Endeavor to Achieve Carbon Neutrality by 2050

To protect the environment by preventing global warming, countries around the world have declared their intentions to achieve carbon neutrality by 2050. Mazda has done the same, announcing its endeavor to achieve carbon neutrality by 2050 in order to protect our beautiful planet. In countries around the world, the supply of renewable energy and electrification will be promoted in stages. Mazda provides multiple solutions, namely, offering various power unit choices that adapt to the power supply situation of each country and meet the needs of our customers. We are also striving to promote renewable liquid fuels and to transition to green factories and offices.

  Since Mazda announced “Sustainable Zoom-Zoom,” its long-term vision for technology development in 2007, the company has continued to carry out business activities with the aim of realizing a sustainable society. Since then, we have come to believe that what is essential for global environmental conservation is not only reducing CO2 emissions from individual automobiles, but also doing so from both a well-to-wheel perspective, including fuel extraction, and from a life-cycle assessment (LCA) perspective, which includes the manufacturing, logistics, disposal, and recycling of vehicles. Toward 2050, we believe that, in order to conserve the global environment, it is essential to reduce CO2 emissions by expanding our business perspective to include the entire life cycle of a vehicle and the entire supply chain. To this end, we will strive to collaborate and co-create with all of our stakeholders and related business partners to find the right solution for each region of operation and carry out the phased implementation thereof.

5. New Technology and Product Development Policy towards 2030

(1) Accumulation of technological assets in line with our Building Block Strategy and highly efficient manufacturing

The realization of a carbon-neutral society will be accompanied by the gradual proliferation of social infrastructure, including renewable energy supply and charging facilities, as environmental regulations tighten around the world.

  Based on the timeline of this proliferation, Mazda has continued to consistently promote its Building Block Strategy by building up technological assets to meet the needs of its customers. We are currently at the stage of further enhancing our internal combustion engines and expanding electrification technologies. Going forward, we will introduce the “Skyactiv Multi-solution Scalable Architecture” products equipped with various electrification technologies. Based on the state of electric power generation infrastructure in our countries of operation, we will deliver multiple solutions, including electric vehicles (EVs), plug-in hybrids, and hybrids, to meet the various needs of our customers. In addition, Mazda will introduce its unique EV platform “Skyactiv EV Scalable Architecture” in 2025 and onwards suitable for EVs of various sizes and body types.

  As a small player, Mazda is capable of responding with multiple solutions because it builds up processes as our assets that can efficiently develop and manufacture various products and technologies in a short-term period and with small investments through Monotsukuri Innovation, consisting of Bundled Planning, Common Architecture, and flexible production. Going forward we will continue to expand Model-Based Development, utilize AI, and promote the shift to digital transformation (DX) to evolve Monotsukuri Innovation. Together with our business partners and suppliers, we plan to steadily accumulate technological assets for the full-scale electrification era while promoting efficient manufacturing.

Future Plan for Electrified Products

(2) Promotion of electrification and introduction of products
—Multi-solution strategy

The “Skyactiv Multi-solution Scalable Architecture” electrification products to be introduced mainly in Japan, Europe, the U.S., China, and the ASEAN region between 2022 and 2025 will consist of five hybrid models,*1 five plug-in hybrid models, and three EV models. In addition, several products with “Skyactiv EV Scalable Architecture” will be introduced between 2025 and 2030.

  Based on this product launch plan, Mazda assumes that all of its products will have some level of electrification, and its ratio of EVs will be 25% by 2030. Going forward, we will flexibly respond to various factors, including the tightening of environmental regulations around the world, the characteristics of each market, and the needs of our customers.

Globally 100% electrification in 2030
25% of total production consists of BEVs

(3) Promotion of human-oriented safety technologies to create an accident-free society

Under Mazda’s unique safety philosophy, we contribute to reducing traffic accidents while gradually upgrading technology that supports drivers and provides a safe and secure driving environment in order to fully unlock people’s driving potential.

  The newly introduced advanced driving support technology Mazda Co-Pilot uses sensors to monitor the driver’s condition at all times, detecting and alerting the driver to the most common causes of accidents, such as drowsiness and not keeping one’s eyes on the road. Furthermore, in the case that a driver becomes unable to operate their vehicle, the system switches to autonomous driving, bringing the car to a safe place, stopping the car while alerting others, and then placing an emergency call in order to prevent a major traffic accident. We plan to introduce Mazda Co-Pilot 1.0, as a first step, starting from our Large Products from 2022.

(4) Development of technologies for connected services and software technologies as a foundation for next-generation mobility services

Mazda intends to fortify its development initiatives regarding fundamental software technologies in order to accommodate for next-generation mobility as a service (MaaS) and to update vehicle functions via over-the-air (OTA)*2 programming. Five Japanese OEM companies,*3 including Mazda, will jointly develop standard engineering specifications for next-generation, in-vehicle communication devices to bring forward the realization of a standardized communication system, in order to provide safer and stress-free connected services as soon as possible. Furthermore, we will move ahead with the development of next-generation electric/electronic architecture (EEA), which will enable the advanced processing of data from inside and outside vehicles.

*1 Excluding mild hybrid models, but including models equipped with Toyota Hybrid System (THS), supplied by Toyota

*2 The updating of software via wireless communication

*3 Mazda Motor Corporation, Suzuki Motor Corporation, Subaru Corporation, Daihatsu Motor Co., Ltd., and Toyota Motor Corporation

Furthermore, we plan to announce revisions to our Medium-Term Management Plan and a longer-term framework, including our business plan for realizing carbon neutrality at an appropriate time in the future.

Our lives and society have been drastically changed due to the COVID-19 crisis. No matter the era, Mazda will continue to be a company that aspires to protect our beautiful planet, create a society that offers safety and peace of mind, and through cars provide social value to all in the form of health, convenience, and vibrant daily lives. For this reason, we will continue to take on the challenge of enhancing long-term corporate value and striving for sustainable growth, while strengthening co-creation with all those connected to the Company with a focus on co-creating our uniqueness with others.

  With that in mind, I would like to ask our shareholders and investors for their continued support.

September 2021

Akira Marumoto
Representative Director, President and CEO