Mazda

Mazda Motor Corporation’s Strategy
Robert B. Austenfeld, Jr.
(Received on August 24, 2004)

1. Introduction
According to Thompson & Strickland (1999), strategy is management plan to make a company successful. In this paper we will be looking at one such plan, the one Mazda Motor Corporation has developed to not only make it successful but for its very survival. First however, some backgroundon Mazda in terms of its history and what it looks like today.

2. Some Background on Mazda
2.1 Mazda’s History Mazda was founded in 1920 as a cork plant but quickly grew out of the cork business. In 1927 the name was changed from Toyo Cork Kogyo to Toyo Kogyo Co. and by 1931 the company was producing three-wheel trucks. Over the next 25 years some 200,000 of these were produced.
The Mazdathree-wheel truck

During World War II, Mazda provided the military with these trucks and with rifles. Protected by a hill, most of the factory survived the atomic bombing of Hiroshima (“Mazda Motor Corporation,” 2004). Passenger car production began in 1960 with the Mazda R360 Coupe. In 1967, Mazda introduced its famous Wankel rotary engine1). By the early 1970s, this
1) The rotary engine wasthe outcome of a 1961 technical cooperation agreement between Mazda and NSU/Wankel of (then) West Germany. The engine has only a few moving parts and is considered superior to the piston driven engine from a performance and maintenance point of view. Its major drawback is its relatively poor fuel economy.

Papers of the Research Society of Commerce and Economics, Vol. XXXXV No. 2

enginepowered more than half of all Mazda’s. Although smoother and quieter than the piston-driven engine, the rotary engine’s gas economy was not as good. With the rise of gasoline prices in the 1970s, Mazda’s sales slumped accordingly. Since then Mazda has moved away although not abandoned the rotary engine, which still powers its latest sports car, the RX-82). By the mid-1980s, Mazda’s vehicle production inJapan had reached about 1.2 million units, one third of which were commercial vehicles. According to Austenfeld (1996), “Just before the “bubble” burst, Japanese production peaked in 1990 at a little over 1.4 million units” (p. 282). Since 1963, Mazda has produced vehicles in other countries. Today such production takes place in some 15 countries. The biggest of these operations is in the UnitedStates at the AutoAlliance International, Inc. company, a fifty-fifty partnership with Ford Motor Co. in Flat Rock, Michigan3). In calendar year 2002 47,603 Mazda-brand vehicles were produced at AutoAlliance. At the other end of the spectrum, the Kenya operation produced only 32 Mazda-brand vehicles in 2002 (Mazda in Brief, 2003, p. 8). Mazda’s relation with the Ford Motor Co. began in 1969 whenMazda, Ford, and Nissan entered a joint venture to make automatic transmissions. In 1979, Ford acquired a 25% equity stake in Mazda. In 1982 Mazda began marketing Ford vehicles in Japan through its Autorama sales channel. In 1988 Mazda began producing the Ford Probe at its then wholly owned subsidiary in Flat Rock,
2) 3) In fact, Mazda’s latest version of the rotary engine, the RENESIS, won theprestigious International Engine of the Year 2003 award (“Mazda ‘RENESIS’ wins,” 2004). Another important Mazda-Ford partnership is AutoAlliance (Thailand) Co. Ltd. located at Rayong, Thailand. This facility produced 31,857 Mazda-brand vehicles in 2002. The Mazda R360

Robert B. Austenfeld, Jr.: Mazda Motor Corporation’s Strategy

Michigan: Mazda Motor Manufacturing (USA) Corporation (MMUC). In1990 marketing of the Ford-produced Mazda Navajo began through Mazda’s U.S. sales network. In 1992 MMUC was changed to an equal partnership with Ford and renamed AutoAlliance International, Inc. And, in 1993, Ford and Mazda “entered into a long-term strategic relationship to enhance competitive power” when Ford took a controlling 33.4% equity stake in the company (Mazda in Brief, 2003, p....