I wish I were in the market for a new car, because if I were, I’d go right out and buy a Mazda. Any Mazda. Seems that while we weren’t looking, one of the world’s most underrated car companies fell ill — four consecutive money-losing years will do that — and although it needs more assistance than any single one of us can provide, it’ll probably take what you’ve got.
Mazda’s troubles mostly follow getting ditched by Ford, which started trimming a long-standing stake in the progressive Japanese company in 2008, around the time its own woes forced it to sell everything that wasn’t nailed down and hock the rest. A controlling 33.4 percent interest dropped to a mere 3.5 percent by 2010, and the Blue Oval’s share recently was further diluted to 2.1 percent with a (some say ill-advised) stock offering hastily organized by Mazda’s banks to raise urgently needed funds.
With its Japanese factories reeling under the export-killing strength of the yen, Mazda will soon paradoxically stop building the Mazda 6 at its Flat Rock, Michigan, factory, a currency-hedging joint venture with Ford. Platform sharing between the two companies will largely dry up — along, one fears, with any near-term potential the Hiroshima firm had to ever make money again.
Deep thinkers have long warned the auto industry of the great reckoning that would one day arrive, a capitalist shoot-out that would leave only a handful of companies standing. Start-up costs are a huge barrier to entry into the business and, once in the game, economies of scale become absolute necessities for survival — and tremendous economies of scale are essential to thrive. In the 1950s, these immutable laws allowed the Fords and GMs of the world to stay rich, while smaller outfits like Packard, Kaiser, Hudson, Willys, Studebaker, and Nash, the so-called independents, went broke.
Back then, the analysis was strictly local; few in the 1960s anticipated the rise of Japan as an automotive powerhouse. Nor did many gloomy futurists of the 1980s recognize the vitality and concomitant longevity of some European makes or the imminent arrival of Korea, or China and India, as automotive eminences.
But the larger truth — the inevitability of consolidation — remains. Where survival is concerned, the size of a car company and important related expressions — the size of its model range and the extent of its ability to share platforms — really do matter.
Things took a big turn for the worse in 1998 when Mercedes-Benz stunned the industry by swallowing Chrysler, a bold if misguided attempt to multiply sales on the quick. Suddenly, greater volume was a must for everyone, forcing many carmakers to ally with others (for instance, Volvo’s hookup with Ford, since unwound, and Nissan’s with Renault both followed in 1999).
Back then, a million sales a year seemed like the new minimum for automakers intent on staying in business, but now that number, according to no less an authority than Fiat/Chrysler’s Sergio Marchionne, is eight million. Mazda, at 1.25 million sales for 2011 with no partner in sight, isn’t close.
Mazda did Ford a world of good (the Escape and the Fusion owe everything to Mazda platforms), and Ford provided the underpinnings for the excellent Mazda 3 I’ve just been driving, and which also serve its own Focus and various Volvos and Land Rovers nicely.
With news of GM’s plans to develop models with Peugeot and Mercedes embracing Nissan, all set against a backdrop of platform-savvy, brand-rich VW, it seems clear that the world’s makers are preparing for another withering season of cost cutting. And Mazda, with finite resources and limited size, is wandering alone, looking like nothing so much as the nice guy who’s about to lose a long-running game of musical chairs.
I like an underdog, and Mazda’s driver-oriented cars intrigue, the way most Hondas once did. From its early application and endless devotion to the Wankel to the creation of the Miata — one of the greatest developments of our time from an enthusiast’s perspective — to its Skyactiv suite of technologies (I saw 39 mpg driving in and out of New York City in a Mazda 3 — in traffic!) to the upcoming 6, which looks rocking, to the diesel engines it has promised to bring to America, Mazda is forever earning our respect.
Now all we need to do is find it a suitable new hoochie. Say, is Ratan Tata in the house?