Automotive News - October 23, 2023 - 25

OCTOBER 23, 2023 * 25
MAZDA
'Night and day' level of
service from financial arm
continued from Page 8
" Five or six years ago, we were not a healthy
brand, " he added, noting that while volume hovered
in the mid-300,000 range, Mazda's share continued
to decline as it prioritized " sales at all cost. "
As part of the reboot, Mazda shifted its focus to
quality over quantity, Donnelly said, and profitable
growth for itself and its dealer partners. It also
set out to improve brand perception to ensure
a successful launch of the next-generation Mazda3
sedan and CX-30 subcompact crossover, as
well as the CX-50 and CX-90, two new crossovers
for the U.S. market.
Retail Evolution
Donnelly said in 2016 Mazda created Retail
Evolution, an image program that encouraged
dealers to upgrade their storefronts to a " more
open and inviting boutique and studio-esque "
environment. The program, he said, has been
transformative, both in the way in which the
brand is now viewed in markets around the
country and the pride dealers feel in representing
Mazda.
The largest investment made totaled $30 million,
but on average the dealers are spending
about $5 million, Donnelly said. About 90 percent
of Mazda sales are now done through Retail
Evolution stores, which have seen profits increase
200 percent.
Mazda also launched a full suite of automotive
MINORITY
Candidates should
research location
continued from Page 8
pond or a big fish in a little pond? "
Fleming said in an interview. " For your
first store, you have better chances of
being a big fish in a little pond. Because
then you're going to have more
scale, you can be more dominant " in
the market.
Wherever dealers end up, Fleming
said they'll need to make themselves a
valuable presence in the community.
" I didn't ask you to go live in Guatemala,
I said go to Minnesota, " Fleming
said. " I'm saying you have to be able to
understand once you go there and get
to know the communities, and those
communities are like any other community.
If you're providing to the community,
if you're the one providing
jobs and adding to the social condiREYNOLDS
Competitors
are facing
their own challenges
continued from Page 8
to better meet their needs.
Walsh said he took their comments to heart
and focused on helping customers with whatever
they need, whenever they needed it.
" We've got really good people, and we've got
really good products, " he said. " We just needed to
get out of our own way and start to work with customers
in a different way. "
Through a spokesperson, Walsh said the last
year for the company " has been an amazing success. "
" We
have retained more customers than at any
point in the previous 15 years, " he said. " We have
also gained more competitors' customers in the
last year than any year in the last 15. "
The company said they are currently at 95 percent
customer retention. Over the past year,
Reynolds said its new customer acquisition increased
64 percent, a significant jump from 37
finance and lease options in the U.S.,
backed by Toyota Motor Credit Corp.,
in April 2020.
The program, called Mazda Financial
Services, replaced a previous reliance
on JPMorgan Chase, providing a more
holistic solution across the entire retail
business.
Mazda Financial Services " has been a
significant contributor to the market
performance
growth we've
experi " The
level of service, the tools and the
technology are really night and day
from what we had before, " he said.
The CX-50 compact crossover, which
went on sale last year and is built at the
Mazda-Toyota Manufacturing USA joint
venture factory in Huntsville, Ala., has
added incremental volume to Mazda's
Donnelly: Quality
over quantity
enced over the last couple of years, and to the satisfaction
that our dealers have with Mazda brand
overall in the partnership, " Donnelly said.
More than 70 percent of Mazda's business is
now done through Mazda Financial Services,
which Donnelly said is " quite high. "
tions, then how can you lose? "
General Motors' dealer diversity
team has seen candidates successfully
relocate to operate stores but said
prospects may find the transition to
ownership smoother in a community
they already know.
Tia Hardeman, GM's director of
dealer diversity relations, said the automaker
has a robust list of vetted and
approved minority candidates as well
as their geographical
preferences.
When an opportunity arises, Hardeman
said GM will submit it to NAMAD
members to identify those interested.
Right fit
Hardeman said part of GM's success
in developing a dealer base that is
more reflective of the population is ensuring
it provides minority candidates
with the right opportunities for stores
where they will succeed. She said
there's a built-in upside to already being
part of the community the dealership
serves and having contacts there.
portfolio of crossovers.
Through August, CX-50 hit sales of
31,719 vehicles, according to the Automotive
News Research & Data Center. Mazda expects
that the crossover, which is in the same segment
as its top-selling CX-5, will eventually see
sales of 150,000. CX-5 sales reached 151,594 vehicles
in 2022, down from 168,383 in 2021.
A second shift at the plant that started in July
Those open to moving will have to do
some serious homework.
" If a candidate did want to relocate to
another area, I would recommend they
learn everything they can about it including
the competition, job market,
economic drivers, land values, etc., "
Hardeman said in a statement to Automotive
News. " Once they have done
their research, they will be in a better position
to truly assess the opportunity. "
Whenever Stellantis has a chance to
get involved in a buy-sell, it explores
whether it can fill that spot with a minority
candidate, said Phil Langley,
the automaker's head of U.S. network
development.
Langley's preference would be for
that person to be from the area because
he or she would understand the
market and know how business is done
there.
If there's a candidate who has interest
in a market they're not familiar
with, Langley said the company tries
to provide enough information up
percent the previous year.
Walsh said after Amplify ended, he and his
team planned to debrief about what they thought
worked well and what didn't, and consider steps
they could take to boost attendance next time.
" We certainly want more because we think
there's a lot of value in doing this, both for customers
and for us - and we're trying to figure out
how we can do that, " Walsh said.
'Changing minds'
Industry analysts viewed the event as a positive
but said the effort to convince people Reynolds
has truly changed remains an ongoing process.
" Events like this can change minds and are
changing minds. Dealers are changing their
perspectives, " said Brian Pasch, a dealership
consultant and founder of Pasch Group, who
gave a presentation at Amplify. " But for some,
once you switch, the pain of going back isn't
worth it. "
Wayne Youngs, founder of Wayne A. Youngs &
Associates Inc., is a consultant who works with
dealerships negotiating contracts with DMS and
customer relationship management providers.
He said dealerships are wary once they have a
Adding a shift at Mazda's
Alabama plant should give
the CX-50 the capacity it
needs to be a sales
juggernaut.
will give the CX-50 the additional capacity it
needs to be a sales juggernaut like the CX-5, Donnelly
said.
The larger CX-90 three-row crossover has also
been a hit. It replaced the CX-9 in the lineup in
February and offers a plug-in hybrid powertrain
and a more refined interior.
Donnelly said the CX-90 has already exceeded
CX-9 from both a sales and market share perspective.
September was a record month for the
CX-90, with sales topping 4,700.
Next up is the CX-70 five-seater, which will offer
a hybrid powertrain. Mazda initially said it will go
on sale at the end of 2023, but Donnelly said the
CX-70 will launch next year.
Electrified lineup
As the industry invests heavily in full battery-electric
vehicles, Mazda's strategy is to expand
its lineup with plug-in hybrids.
The automaker does plan to launch one battery-electric
vehicle in 2025. Donnelly did not reveal
specifics, but confirmed it will be an existing
nameplate and likely a crossover.
Being a smaller brand with limited volume,
Mazda could replace the CX-5 with an EV, which
would benefit the CX-50, since the crossovers occupy
the same space.
Other than offering one EV, Mazda will continue
the proliferation of plug-ins throughout its
lineup for the rest of the decade.
" Plug-in hybrid is the right technology for the
marketplace today, given any number of challenges
in terms of infrastructure and everything
else, " Donnelly said. " We're committed to an
electrified future, but for the near term, we feel
like we have the right technology. " n
front to detail the automotive landscape
in that particular area. The company
will share demographics in that
market or how the used-car market is
there to help the candidate make an
educated decision on whether it's a
good market to be in.
Langley has seen cross-country
moves work. He pointed to one case
around 20 years ago when the company
had an open point in Arizona. A minority
candidate from Virginia landed
the store and moved there a year in advance
to work at another Chrysler
dealership there. The dealer used that
time to get educated on the market.
Familiar terrain
Although these situations can play out
successfully, Langley would like to bring
in someone from the general area.
" Last thing we want to do is relocate
or put a person into an area that they
don't want to be, or their family
doesn't want to be, " Langley said. " Just
assimilating into the community - is
negative experience with a vendor.
" Car dealers, once they get burned, they have
very long memories, " Youngs said. " That's one of
the things that Reynolds has to overcome, and
they have to do that by basically doing the right
things in the marketplace. "
Unique opportunity
If Reynolds continues to be more customer-friendly,
it has a unique opportunity to gain
some ground because its main competitors face
their own challenges, Youngs said. This includes
CDK's reorganization under owner Brookfield
Business Partners and upstart Tekion's push to
generate revenue in light of the venture capital
and public market slowdown for technology
companies, he added.
" From that standpoint,
it's an unbelievable
time for Reynolds to gain a really big foothold in
market share, " Youngs said.
Market share data is not available, but CDK
Global is considered to be the biggest DMS provider
in the U.S. as Reynolds and Dealertrack vie
for second and third place, Matthew Gillrie, CEO
of automotive software consultant Gillrie Institute,
told Automotive News previously.
it the right community? Being a part of
the community as an automobile
dealer is critical, right? Being involved
in civic groups, that type of thing. "
Toyota Motor North America had about
three dozen reps from its retail operations at
the NAMAD conference to network with
minority candidates. The Toyota and Lexus
teams are always on the lookout for qualified
prospects it can turn to when dealerships
are being sold, said Ken Parkman,
general manager, retail market development
for Toyota Motor North America.
Parkman said candidates need to be
true to themselves when weighing the
possibility of a move and whether they
can truly be happy in another locale.
" Anybody just moving to get a new
store but not really wanting to be
there long term, that may not be the
best fit, " Parkman said. " I think that
candidates need to really consider
what's going to make them happy,
where they think they're going to be
successful, and, from there, look for
the opportunities. " a
Sansone said he liked Reynolds' technology and
the reps with whom he dealt years ago. But he ultimately
dropped the company because of what he
said were " fees upon fees " and Reynolds'
" heavy-handed " policies.
Still, the new Reynolds has made an impression,
he said.
" I did leave the meeting feeling that they were
sincere about having dealer partners and being
more of a friendlier company to do business
with, " Sansone said.
" Your DMS provider is incredibly important to
the success of your dealership. You certainly
want to have somebody that you feel you can
work with, and I never felt that way with Reynolds
and Reynolds before. "
He said he's pretty sure his invitation to Indianapolis
from Reynolds was to " earn my business
back. "
And they might. Sansone said in the past he
would " absolutely " rule out Reynolds and Reynolds
from consideration if he were looking for a
new DMS.
Now?
" I will not exclude them from the conversation, "
he said. n
Automotive News - October 23, 2023

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