Mazda chief OK with dealer level

After reducing its North American dealer network by 30% since 2005, Mazda CEO Jim O'Sullivan said he thinks the company is at about the right number.
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Mazda's U.S. dealership count peaked at more than 900 and now stands at about 640, O'Sullivan said last week during a speech to the Automotive Press Association in Detroit. O'Sullivan said the reduction is the result of Mazda working with its dealers and was aided by other manufacturers that were working to reduce their total number of dealerships.

"It's been an orderly transition, and it hasn't been something that has been forced," O'Sullivan said. "Right now, we are trying to maintain our dealer count and we think it's right where it is right now. We are not looking at any further reductions."

Six years ago, 19% of Mazda dealerships sold the brand exclusively. Today, he said, 51% Mazda dealerships are exclusive stores. Those dealerships account for 75% of Mazda's retail sales.

Foreign automakers Mazda and Hyundai are trimming their ranks of workers in the United States. Mazda saw its sales decline by over 10% in 2008 and the new year is shaping up to be significantly worse as the Japanese automaker posted a sales decline of 27.3% in January compared to the previous year. In response, roughly 110 Mazda employees were laid off this month from a total of about 800 employees.

Unlike Mazda, Hyundai was one of the few automakers to actually record a sales increase last year and again posted positive numbers in January 2009. Regardless, the Korean automaker has also trimmed its ranks in the U.S. by about 46 employees, suggesting that Hyundai forecasts tough roads ahead, as well. Most of the employees being let go by both automakers come from their sales and marketing departments.