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Saturday, October 1, 2022

With only 64,000 units sold in six months, when will Changan Mazda see the light of day?

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Mobil Mazda China has clarified that the discontinuation of the Mazda6 and other models is actually due to a shortage of parts and chips in the Japanese market, not a complete withdrawal from the market. Moreover, the Chinese market is not affected by the problem. Even so, Changan Mazda is not happy.

Figures show that in the first half of this year, the Mazda6 Atze, which was rumored to be “discontinued”, only sold a total of 4,232 units, with a monthly average of only 705 units. Even though netizens are bemoaning the discontinuation of the Mazda6 Atze, consumers have already lost interest in this classic model. Even if it is not discontinued, the Mazda6 Atze’s contribution to Changan Mazda’s sales is minimal. The real concern for Changan Mazda should be the sluggish market performance, rather than the “discontinuation” of the Mazda6.

Changan Automobile’s June production and sales flash report show that in the first half of this year, Changan Mazda’s cumulative sales were 63,655 units, an increase of 5.51% year-on-year. However, this growth rate is not encouraging. It should be noted that Changan Mazda had not yet merged with FAW Mazda in the same period last year. If we calculate the combined sales of Changan Mazda and FAW Mazda in the same period last year, Changan Mazda’s first half of this year fell by 34.29% year-on-year. This was Mazda’s fourth consecutive decline in the Chinese market and the largest decline.

After reaching its sales peak in 2017, Mazda has been in decline in the Chinese auto market, and the weakness of its market competitiveness is evident. The official website shows that the combined Changan Mazda has seven models on sale, which is close to that of a mainstream joint venture. However, unlike the mainstream car companies, which are “full of experts”, Changan Mazda only has one model, the Mazda3 Enclave, that can really fight.

Of the 63,655 units sold by Changan Mazda in the first half of this year, the Mazda3 Enclave alone contributed 37,552 units, accounting for nearly 60 percent of sales. The other six models together contributed only 26,103 units, a 52% drop year-on-year. In particular, in a Chinese market where SUVs are in full swing, Changan Mazda’s leading SUV for many years, the Mazda CX-5, only sold a total of 10,595 units in the first half of this year, a monthly average of fewer than 1,800 units. In front of a host of local SUVs and first-tier joint venture SUVs, the Mazda CX-5 was completely drowned out.

An objective factor is that the integration of Changan Mazda and FAW Mazda dealer networks has yet to show the desired results. There are media reports that at present, the former FAW Mazda 4S shops are still mainly promoting the MAZDA6 ATENZA Atze as well as the CX-4 models. The former Chang’an Mazda 4S shops, on the other hand, are mainly pushing models such as the Mazda3 Enclave and CX-5. Due to the difference between the stock and the main models in the shops of the former FAW Mazda and Changan Mazda dealers, the sales of Changan Mazda’s hot Mazda3 Enclave and CX-5 are to a certain extent restricted. But anyone with a clear eye knows that weak product power is the main reason for Changan Mazda’s declining sales.

Of Changan Mazda’s seven models on sale, only the Mazda3 Enclave and CX-30 series are new in the last two years. It has been nearly four years since the Mazda CX-8 was launched, and the CX-4, CX-5 and Atze have been in service for nearly 10 years, with product strength and selling points far removed from current trends.

And in fact, the market performance of the two new vehicles launched by Changan Mazda last time is not optimistic either. Data shows that in the first half of this year, the Mazda CX-30 series (including the EV model) sold a total of only 6,496 units, a monthly average of fewer than 1,100 units, down 5.4 percent year-on-year. Even the Mazda3 Enclave, the mainstay of Changan Mazda’s sales, saw an 11.4 percent year-on-year drop in sales in the first half of the year.

What’s even grimmer is the probability that Changan Mazda’s slump will continue. According to Mazda China’s plans, new product launches for Changan Mazda will not take place until at least next year. The chairman of Mazda (China) at that time, Tetsu Nakajima, had said that Changan Mazda would improve or revamp based on existing products by 2022.

With back-to-back years of decline, Mazda still fails to pay attention to the Chinese car market. The “Post-2022 Crossover SUV Lineup Development Plan” released by Mazda Motor Corporation clearly states that five SUVs – CX-50, CX-60, CX-70, CX-80 and CX-90 – will be launched by 2023. But nearly a year later, the all-new Mazda CX-50 has yet to appear in the Chinese market. There is also no news of the new CX-60, which was launched this spring, being launched in China. In terms of planning, Mazda has once again left its latest products and technologies to the European, American and Japanese markets.

This brings more uncertainty to Changan Mazda’s future development. In the last two years, the already saturated Chinese car market has been further hit by factors such as the epidemic and parts shortages. With the general decline in the car market, small volume car companies are having a tougher time than the top tier car companies. The successive break-ups of Guangzhou Automobile Acura and Guangzhou Automobile Mitsubishi have proved the cruelty of the market. But the two aforementioned joint ventures will never be the last participants to exit the Chinese market. I’m just not sure how far Changan Mazda is from that end at this point in time.

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