Mazda Navigates Headwinds: Sales Dip Amidst Industry Shifts, CPO Sales Rise

IRVINE, CA – November 15, 2023 – Mazda North American Operations (MNAO) today reported a challenging October, with overall sales down 32.6% compared to the same period last year. While the automaker faces headwinds from ongoing supply chain disruptions and economic uncertainty, a bright spot emerged from its Certified Pre-Owned (CPO) vehicle sales, which increased by 2.5%. This performance underscores a strategic pivot as consumer behavior shifts in response to high new car prices and tightening credit conditions.

Navigating a Complex Landscape

October sales totaled 25,161 vehicles, a significant decrease from the 37,306 units sold in October 2022. The decline reflects broader industry trends, with major automakers like Toyota (-10.7%) and Honda (-12.3%) also reporting decreased sales. However, Mazda’s dip is notably steeper, suggesting unique challenges beyond the macro environment.

“The automotive market is currently a complex interplay of factors,” said one industry analyst, speaking anonymously. “High interest rates, persistent inflation, and lingering supply chain constraints are creating a challenging environment for all automakers. Mazda, with its relatively smaller production scale, is particularly vulnerable to these disruptions.”

Supply chain issues, specifically the ongoing semiconductor shortage, continue to plague the industry. Mazda’s reliance on key suppliers in Japan and Southeast Asia has amplified these challenges, leading to production delays and reduced inventory.

CPO Sales: A Silver Lining

Amidst the decline in new car sales, Mazda’s CPO program is gaining traction. October saw a 2.5% increase in CPO sales, demonstrating a strategic shift towards providing affordable alternatives to budget-conscious consumers. Year-to-date, CPO sales are up 0.3%, indicating a steady, albeit moderate, growth trajectory.

“Consumers are increasingly seeking value,” explained a Mazda dealer, speaking on condition of anonymity. “With new car prices remaining high and interest rates on auto loans climbing, CPO vehicles offer a compelling combination of affordability, reliability, and peace of mind. We've seen a noticeable increase in demand for certified pre-owned models, particularly in the lower price range.”

The success of the CPO program reflects a broader industry trend. CPO sales have surged in recent months, driven by consumer demand and the availability of extended warranties and thorough inspections, creating a segment with increased trust.

Regional Disparities

While sales are down overall, Mazda is experiencing significant regional disparities. Sales in the United States have been particularly weak, reflecting the impact of high interest rates and economic uncertainty. However, sales in Canada and Mexico are on the rise, suggesting a different economic landscape in these markets.

“Canada is benefiting from a stronger economy and a relatively stable currency,” said an automotive economist. “Demand for SUVs, particularly models like the Mazda CX-50, is driving sales. In Mexico, a growing middle class and increasing disposable income are fueling demand for new vehicles.”

The CX-50, launched last year, has emerged as a key driver of sales growth, particularly in Canada and Mexico. The model’s unique design, off-road capabilities, and strong brand appeal are resonating with consumers in these markets.

Looking Ahead

Mazda faces several challenges in the coming months. The ongoing semiconductor shortage, persistent inflation, and rising interest rates are expected to continue impacting sales. However, the company is taking steps to mitigate these risks, including diversifying its supply chain, investing in electric vehicle (EV) technology, and expanding its CPO program.

“Mazda is committed to providing high-quality vehicles and exceptional customer service,” a company spokesperson stated. “We are confident that we can navigate these challenges and achieve long-term success.”

The company is also investing in the development of EVs, recognizing the importance of sustainability and the growing demand for electric vehicles. While Mazda lags behind some of its competitors in the EV space, the company is committed to launching a range of electric models in the coming years.

“Mazda’s long-term success will depend on its ability to adapt to the changing automotive landscape,” said one industry analyst. “The company needs to continue investing in innovation, sustainability, and customer satisfaction. The CPO program is a good start, but it’s just one piece of the puzzle.”

Mazda's performance in the coming months will be closely watched by industry analysts and investors. The company's ability to navigate the current challenges and capitalize on emerging opportunities will determine its position in the competitive automotive market.

About Mazda North American Operations (MNAO)

MNAO is a leading automotive company dedicated to delivering innovative, high-quality vehicles and exceptional customer experiences. Headquartered in Irvine, California, MNAO oversees Mazda’s sales, marketing, and customer service operations in North America.