Şükrü Berk

10.03.2016

2016MAZDA MOTOR CORPARATION

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TABLE OF CONTENTS

HISTORY OF COMPANY 3

PRODUCTION FACILITIES 12PRODUCTION LINE 15TRADE STRUCTURE 18OPERATIONS IN TURKEY 20

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HISTORY OF COMPANY Mazda was established in 1920 under the name of Toyo Cork Koygo. Ltd in Japan, Hiroshima. As it mentioned from their current website, the name of Mazda inspired by the first god of the earliest civilization of West-Asia that is known as ‘’Ahura Mazda’’. In March 1931, they manufactured their first vehicle that is being 3-wheeled truck, which was named ‘’Mazda-Go’’ (see Picture 1). With this type of vehicle, they were aiming class-leading performance and maximum loading capacity.

Within 2 year of manufacturing their first product, the company started to export these 3-wheeled trucks to Dalian, Mukden and Tsingtao which are the cities of China and also, Mazda was diligently made advertising activities from early on. In 1936, Kagoshima-Tokyo- Caravan traveled over 2,700 kilometers between Kagoshima and

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Tokyo in 25 days with their four different type of Mazda-Go. The main aim was that showing an effort to promote excellence and reliability to their customers. As a result of this afford, the sales of Mazda vehicles has increased importantly. In same year, meanwhile, a brand logo has created that likes ‘’Flying M’’ figure. A decade after, Hiroshima was bombed by USA during the second world war, while Mazda was trying to produce its first small sedan car. The atom bomb affected a few part of the main production facility thanks to the located 5.3 kilometers far away from main area, but, they had to cease manufacturing process for a while. Meantime, the all functions of company were transferred to Hiroshima government building. After the destructive war, in 1949, they started to export of 3-wheeled trucks to India. A year later, the new brand 4-wheeled light truck, ‘’CA Model’’, has released. In 1960, the first passenger car, 4-seater with 16 HP engine, has manufactured and released. Following seven years, another five different type of vehicles also has launched which addressed disparate purposes for customers. The Mazda Carol, which was launched in 1962, sold more than 1 million in a one year.

In the light of these progresses, Mazda Company started to export European market. The years of 1967 and 1968 has become victorious

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in terms of sales in Europe with ‘’Cosmos’’ (see Picture 3), Mazda’s first rotary engine vehicle. Most of cars were working with Winkle system possesses rotating engine and high performance in it which was uniquely produced by Mazda Co.

When it comes to 1970, they expanded their operations by serving USA market. Till 1973, operations were successful and many North Americans preferred to buy Mazda’s Winkle System cars. However, customers shifted to more fuel-saving cars because of the oil crisis starting from 1973. The oil crisis and as a result of shifting, they were caught flat footed and went to the wall. Because, they had currently big trouble with their debts. Nevertheless, the Sumitomo Bank supported the firm so, the financial standing of company got better. Additionally, with new lunges, such as creating a new brand small-size sport cars, RX-3 and RX-7, and nominating a new president, the company won general approval from the customers for new alteration.

In 1979, cumulative domestic production reached 10 million vehicles which was 1 million vehicles in 1963. Also, at the end of 1979, the

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Ford Motor Company purchased %7 of Mazda’s shares to invest and for collaboration. As a result of partnership, Mazda would be helped Ford with small-car engineering and lean manufacturing and Ford would be reciprocated with finance and marketing know-how.

During 1980’s, Mazda Co. expanded its production facilities with new investments at two different Japanese cities and as newly in another country, Columbia. In 1984, company was renamed as ‘’Mazda Motor Company’’. In addition, the Mazda Foundation has established which is dedicated to building better life for young people. In late 1980’s, company increased its investments mostly to R&D activities. In this sense, it was opened Mazda research and development in Irvıne, CA, USA and built new research center in Yokohama, Japan, which is currently used by company. Apart from these, some models were fully re-designed for customer needs which are ‘’Familia’’ and ‘’Capella’’ (see figure 5) and the first roadster (MX-5) was launched in 1989 (see figure 5).

In 1990 December, cumulative production reached 25 million units. A year after, Mazda 787b racing sport car won the 59th Le Mans 24-Hour Endurance competition, as being the first victory of a

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Japanese automobile industry. In 1992, a new local production center established in China. In the mid of 1990’s, the company acquired ISO 9001 certification, first among Japanese automakers. Although there were some good developments, in total, the company was suffering financial trouble during these years. When it comes to 1996, Ford Motor Company had obtained %33 of shares becoming first shareholder in the company. Henry Wallace was elected as President who was the first non-Japanese. As soon as he put into the chair, he introduced a couple of new strategies and innovation movements for the company. Reducing costs, creating new product plans to increase efficiency and regulating the distribution channels were just a few. Imminently, the company started to gain profit again and these redesign would be the key success of company’s near future. As a new segments, in 1990, they launched the first ‘’MPV’ and fully redesigned ‘’RX-7’’ to their customers.

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At the end of 2000, millennium plan (mid-term plan) was announced by company. As a part of Millennium schedule, Juana Plant Number 2 in Hiroshima, which decreased the domestic production capacity by %25, was closed to meet European market needs and to reduce exposure to volatile foreign currency fluctuations. In this sense, it was started production of small cars in Valencia, Spain in early 2003, with Ford Motor Company. By 2002, new brand statement or marketing campaign ‘’Zoom-Zoom’’ was introduced. The brand massage was aiming to capture feeling, expressing the passionate spirit of motoring enjoyment that drives Mazda forward. All in all, the company introduced four new and one redesigned model from 2001 to 2008. One of them was RX-8 coupe sport car, 4-seated which received the ‘’2004 RJC car of the year’’. The one was fully redesigned Mazda2 which received the ‘’World Car of the year Award’’. In these periods, Mazda’s sales figures and net income increased steadily.

The Global Crises arose from USA had affected destructively all world-wide automakers as Mazda Motor Company. The company’s net income from sales were below zero starting from 2009 and in 2012, it reached the bottom as - 2, 2 billion dollar loss as a result of the sequential events which were Great East Japan Earthquake in 2011, summer electrical power shortages, the European financial crisis, a record-breaking strong yen and flooding in Thailand. Also, in 2010, Ford Motor Company, which had the majority of shares, declared the dispose of its most of stakes by reducing below %4. Hereby, a great financial subsidy decreased seriously to the Mazda.

To come over these distasted bad situation, ‘’Structural reform plan’’ has announced to investors, suppliers and customers so as to strengthen framework for Medium- and Long-Term initiatives.In first step, the company wanted to promote ‘’Global Alliances’’. Before the announcement of that, the agreements for alliances have already concluded with two companies, Sollers (agreement to establish joint production sites in Russia) and Fiat (agreement to develop and produce convertible, two-seat sports car). At the end of

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2012, agreement was made with Toyota on Toyota vehicle production at Mazda’s new plant in Mexico. In 2014, operations at the New Mexico plant has started.

In second place, SKYACTIV technology used in new models, which advanced product strength, the brand, and design, while building a cost structure that can respond to a strong yen environment. The CX-5 model which possesses ‘’SKYACTIV’’, had a strong reception in Japan and overseas, providing a large contribution in terms of sales and profit for 2013 fiscal year. It was built a transmission plant with an annual capacity of 400,000 units in Thailand to meet the growth in demand for SKYACTIV- equipped vehicles.

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As a result of this new business innovation, new joint-ventures, new car models and new marketing campaigns, Mazda Motor Company has showed incredible development in recent years. From 2013 to 2015, global sales of vehicles and net income from operations has skyrocketed ever. Nowadays, Mazda has announced its ‘’Second Structural Reform Plan’’ to carry its remarkable success to future.

PRODUCTION FACILITIES Japan

Hiroshima Plant:

The complex consists of two main elements, the head office in Aki District, and the main plant in nearby Ujina District. It was Mazda's only car-assembly plant in Japan until the Hofu Plant opened in 1982. Today, it has 515,000 production capacity per year. Main models in production are CX-3, CX-5, CX-9, Roadster, Premacy, MPV, Biante, Verisa.

Hofu Plant:

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The complex consists of two main elements, an automobile assembly complex in Nishinoura District, and a transmission plant in nearby Nakanoseki District. It was the second plant opened to support operations at the original Hiroshima Plant. Production capacity is 481,000 per year. Models in production are Demio, Mazda3, and Mazda6.

Thailand

Auto Alliance Thailand (AAT) is the name of a joint venture automobile assembly firm co-owned by Ford Motor Company and Mazda Motor Corporation in Rayong province, Thailand. Modeled after the Ford-Mazda Auto Alliance International joint venture in the United States, AAT builds compact pickup trucks and SUVs primarily for the South-East Asian market, with exports to other developing markets, and Europe as well. Production capacity is 140,000 vehicles per year. Models in production are Mazda2, Mazda3 and BT-150

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Mexico

In 2014, new plant established as a joint venture with Sumitomo Corporation in Mexico which is names Mazda de Mexico Vehicle Operation. In a year, accumulated production has reached 100,000 units. It was announced that the production capacity will have increased to 250,000 vehicles per year by 2016 fiscal year. Exporting countries are USA and Europe. Models in production are Mazda2, Mazda3, Toyota- brand compact vehicles.

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PRODUCTION LINE

The pictures below shows the product line of Mazda and its global sales volume by one by in 2015. J=Japan, N= North America, E=Europe, C=China and O=Other Markets

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TRADE STRUCTURE

The picture below illustrates the Mazda’s exports by region at the year of 2015. Total exports were done in 2015 is 737,869 units. As it seen, North America Region forms majority of exports by being 296,023 units. Europe Region comes from secondly by being 200,036 units. Africa region forms the smallest part of exportation by being 8,165 units.

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Upon further looking by 5 years of exports, it can be said that export proportion of North America region in total exports has increased steadily from 2011 to 2015. In Europe, it fluctuated year by year but, the proportion has increased when it compares with 2011.

OPERATIONS IN TURKEY

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Mazda Motor Company had made a distribution agreement with ‘’Mermerler Group’’ and entered the Turkish automobile market legally in 1990. The first models released were ‘’323 and Lantis’’. During the mid-1990’s, Mazda’s models were the best-selling cars in terms of imported cars to the Turkey. However, because of the fact that significantly rising taxes on imported goods by agreement of custom union, Mazda’s competition strength decreased importantly compared to its competitors. In 2004, Mazda3’s sales has started which addresses C1 segment’s customer profile and, in 2005, the RX-8 sport car model has been released which has Renesis rotary motor with 240 hp, 1300 cc and with affordable price. In 2007, the cooperation between Mermerler Group was halted. The

main reason was that decreasing sales figures since 2005 both in light commercial and automobile segment. Thus, Mazda transferred responsibility for the Turkish market to Mazda Motor Europe (MME),

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and the new NSC in Turkey was established in September 2007. The company was officially established as Mazda Motor Logistics Europe N.V. Merkezi Belgium Turkey Istanbul Branch. Steve Newton was appointed managing director of the new distributor on June 2, 2008 and operation began on June 5. Although company had difficulties in its global sales, the new mandated staff showed great marketing effort with its redesigned Mazda3 and the sales of car increased significantly by %200 from 980 to 3.050 in a one year (see figure 13).

As it said at history section above, company had faced many difficulties starting from 2010. In this context, this situation happened in Turkish market as well. From 2010 to 2012, sales collapsed which was being worst of company’s Turkish market adventure (see figure 13).

Table 1 demonstrates the Mazda3’ sales figure, which is the best-selling car of Mazda in Turkish market, from 2010 the 2015. This model comprised approximately half of the sales in each year. Today, this model offering the sale with two options, hatchback and sedan, starting from 65.000 TL for sedan and 71.300 TL for hatchback.

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 20150

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2000

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Otomobi l ve Hafi f Ticar i Satış lar ı (2 0 0 4-2 0 1 5)

Otomobil Hafif Ticari Toplam

MAZDA 3 SEGMENT C1

SATIŞ RAKAMLARI TOPLAM SATIŞLAR

TOPLAM SATIŞLAR İÇINDEKI PAY

2010 1110 2253 49%

2011 1001 1620 62%

2012 482 810 60%

2013 809 1377 59%

2014 580 1291 45%

2015 735 1761 42%

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Beside the Mazda3, there are three different options also. These are Mazda6 sedan, New Mazda CX-3 SUV and New Mazda CX-5 SUV. The picture below shows the latest interior design of Mazda3. As it seen, it looks like very modern, simple and customer friendly.

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