Mazda’s Akira Marumoto on a cautious EV approach

Where do you think Mazda’s U.S. sales are headed in 2023?

Dealer inventory levels are just over 10 days. So there is potentially very strong demand. Vehicles will be sold as long as we supply them. Unfortunately, the quota that the US team would like to provide is not yet available.

Starting next year, I think we should start thinking about a recession. It depends on the size of the recession, but we’re not too pessimistic about it. But so far, sales of the luxury model have been strong, and we are ready to accept that the sales mix of the luxury model may not be as good as next year. On the other hand, interest rates are rising, which could lead to higher customer payments. So this year’s rich, high-grade mix may not apply next year.

Could Mazda’s U.S. Sales Decline in 2023?

Sales trends for the next fiscal year have not yet been determined. If we don’t have problems like the lockdown in Shanghai and the supply of semiconductors improves, we think we can grow both globally and in the US.

How serious is the labor shortage around Mazda’s new Alabama assembly plant?

Alabama faces tough times. The unemployment rate is about 2.2%. Therefore, it is tighter than the national average. I think the labor shortage in the manufacturing industry is a really serious problem.

We have been dealing with COVID-19 for over 2 years and 9 months. Service jobs are really growing, manufacturing jobs are not. Also, the youth unemployment rate is very bad. That is the challenge facing US manufacturing.

What is Mazda’s EV strategy in the US?

Looking to the US, they eventually want to produce EVs there, but the earliest they can do is in the second half of Phase 2 (Phase 2 runs from 2025 to 2027). There is a lot to research and study first. We are not considering building a new EV factory.

When Mazda thinks of making an EV, the Alabama and Mexico factories are two factories it can think of for the US market.

At Alabama, we introduced the CX-50. Therefore, we must develop the CX-50 into a highly profitable product. And we have to grow the Alabama factory into a high-quality factory.

Employment situation, battery procurement situation, [Inflation Reduction Act] requirement. I’ll make a decision as soon as it’s clear.

Is Mazda working on its own battery technology in-house?

We are actually doing research in that area right now. We are working from the chemical reaction level and would like to establish the technology.

In Phase 3 (2028-2030), we will decide whether we can produce these batteries in-house, based on our development progress and whether we can establish a sound financial foundation for this.

Could a small automaker like Mazda realistically achieve its own battery breakthrough?

I’m just starting my research, so I can’t make a decision yet. However, we want to understand control technology, so we are studying chemical reactions.

If you want the best battery control technology, you need to understand the chemical mechanism.

Is the industry over-investing or under-investing in EVs?

Compared to two years ago, customer acceptance of EVs has far exceeded our expectations. I think the amount of EVs will continue to increase in the future. However, the timeline for EV adoption cannot be predicted due to many uncertainties.

Why are you building an EV? The answer is the realization of a carbon-neutral society. In order to realize a carbon-neutral society, it is necessary to increase the amount of carbon-neutral power generation in line with the spread of EVs. Otherwise it is pointless.

Increasing EVs in markets that rely on coal and oil-based power generation may not help carbon neutrality.

This cannot be achieved by the automotive industry alone. Cooperation with energy policy is necessary. Power generation methods have not caught up with the spread of EVs. We have to find a balance, but we’re not there yet.

Mazda’s timeline calls for the use of carbon-neutral fuels by 2035. How do you envision that?

We use trucks for in-house transportation. For example, mass-produce engines here in Hiroshima and move them to the Hofu assembly plant in Yamaguchi. We envision the use of carbon-neutral fuels in such transport.

What is the strategy of the MX-5 Miata in the electrified era and the RX sporty car of the future?

We will continue to electrify these models to achieve carbon neutrality. And we want to continue to protect the essence of the Mazda brand, “driving pleasure.” We will continue to develop that value. We are committed to continuing it.