Zooming Back: 4 Reasons Why Mazda Is the Little Carmaker That Could

We're all used to American carmakers struggling and Japanese automakers thriving. But not everyone in Japan has been tasting success. Mazda, for one, hasn't been profitable for four years. However, the company is on the way back. And if it can sustain its recovery, it will stand a pretty good chance of making an impact on the global auto scene. Here's why:

1. Like Ford (F), Mazda has an impeccable lineup of vehicles. Ford has the best lineup of cars and trucks in the auto industry right now, from small cars to full-size pickups. Mazda is like a stylish, micro-version of Ford: it has a peppy subcompact, a suite of appealing sedans, a versatile hatchback-cum-minivan, the beloved Miata, the RX-8 sports car, two crossovers, and an SUV. Simply put, unless you're in the market for a big pickup, Mazda has a car for you. Nothing surprising here, given that Ford used to own a significant chunk of Mazda. The two companies have learned from each other.
2. Performance sells. Mazda has been trading on it's "Zoom-Zoom" tagline for a while now. The idea is that these are versatile, everyday vehicles that consistently deliver a great driving experience. A decade or so back, people were less interested in this. But now, due largely to the influx of German cars to markets outside Europe, performance is desired. Both the Miata and RX-8 are superb-handling rides -- with the MX-5 being perhaps the most fun you can have behind the wheel for less than $25,000. It's fair to assume that in developing markets, this consumer requirement may become a great differentiator for the company.
3. It's the MPGs, stupid. Mazda doesn't build a vehicle than gets less than 20 mpg. In fact, 25 is more like it. The carmaker already is where other carmakers need to be, in terms of fuel economy. And this is without a hybrid, proving that it is possible to deliver the MPGs with conventional propulsion. Mind you, Mazda will have to improve this in the future, at least in the U.S., as fuel-economy standards rise in the future.
4. Solving the export problem. Mazda is making two moves that should enhance its business going forward. First, it's going to manufacture more cars outside Japan, evading the challenges it's currently having with the Yen and exchange rates. Second, it migrating away from production in the U.S. and focusing instead on emerging markets. This is a good move. Mazda can keep the U.S. happy with exports, but with less than 5 percent market share, it doesn't make much sense to press for growth in such a hyper-competitive arena when it could chase buyers in Latin America -- and build the factories it needs there.

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