By Mikko David
Despite its lofty ideals, Mazda did have to deal with a great number of challenges during its formative years. Towards the end of the Second World War, the city of Hiroshima was leveled when the first atomic bomb was dropped on the city. Mazda lost many workers and their families. But just four months after the bombing, the company was again making its tricycles to help in rebuilding the community. While it did come back into the car making business years after, again defying convention at that time by investing in technological innovations such as the rotary engine to retain its independence in the consolidating Japanese automotive industry in the ‘60s, Mazda still had to go through more rough patches in the years that followed.
Close to the brink of bankruptcy in the mid-90s due to a costly expansion program and lackluster sales, Mazda found a lifeline with a controlling infusion by Ford Motor Company. This era transformed Mazda from a maker of highly engineered cars, into a manufacturer that built cars which catered to its customers’ needs. Through it all however, the small company has retained its never stop challenging attitude in the quest to engineer and create advanced, fun to drive cars. It can be argued that during their long technological partnership spanning more than 40 years, Mazda even propped up Ford with its engineering prowess.
In 2008, Mazda freed itself from Ford’s control, getting back again to charting its own destiny while continuing to challenging the norms of the automotive industry. It again bucked the trend by going against the prevailing industry practice of engine downsizing and instead improving on existing technology to deliver improved performance and fuel efficiency. This gave birth to what we now know as Skyactiv Technology.
This case study shows that car manufacturers deeply rooted in product research and development tend to outlast, or at least have a viable semblance of weathering challenging times. In sharp contrast to companies which opt to remain conservatively stagnant in the hopes of bouncing back to profit after the storm.
With the recent revelation that Mazda Motor Corporation in Japan is seeking a US$2.8 billion loan from various Japanese banks to weather the COVID-19 pandemic crisis, it seems to be yet another daunting challenge for the manufacturer in its unfolding story. Mazda is not alone in this predicament as other car manufacturers are likewise finding ways to deal with this evolving calamity. With recent news, however, that Mazda will continue to invest in Research and Development in the medium term as part of its six-year management plan, there is still hope that it will come out on a better footing compared to other brands now ailing from lost sales and dwindling incomes from the first-half of the year.
Mazda is not new to dealing with seemingly insurmountable tests. The company’s unconventional thinking and its ingrained challenger spirit have saved Mazda in the past. Its solid footing in engineering innovation and R&D has made it an attractive partner not only to Ford once, but also to perennial competitor and market leader, Toyota. In 2017, Japan’s largest automaker invested a 5% stake in Mazda and Mazda did the same with Toyota. The alliance is of mutual benefit to both companies as they are embarking on building a new manufacturing plant in the US and sharing Electric Vehicle technology.
While it remains to be seen how the novel corona virus spread will shape the future of the automotive industry, Mazda’s decision to continue investing in its product development, and consequently the people behind these products, is a positive sign that it will, at the very least, face another challenge squarely and with honor. Mazda did not make it to the century mark for nothing.