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Mazda aims for image boost from new RX-8

Reuters / April 10, 2003

TOKYO -- Mazda Motor Corp. is hoping for great things from its new RX-8 sports car -- if not in terms of sales, then certainly in terms of a boost to its image.

After spending half of the 1990s in the red, Mazda, owned one-third by Ford Motor Co., has been trying to rebuild itself by crafting a fresh identity as a maker of cars with pizazz.

The muscular RX-8, billed as the world's first true sports car with four doors, seems to fit the bill in that respect and it has won favorable reviews since journalists and analysts started taking it on test drives late last year.

"The RX-8 is great fun to drive, it's very smooth, and a usable, four-door four-seater," said Steve Usher, senior analyst at J.P. Morgan.

"In terms of what it's going to do for Mazda's image, the RX-8 is going to be very important."

The RX-8 was officially launched by Japan's fifth-largest auto maker on Wednesday.

Its launch is being seen as a vital part of Mazda's recovery plans after the firm tumbled to a record net loss in the 2000 business year, but analysts see a long and tough road ahead.

For the business year that ended in March, Mazda expects to have tripled its group net profit to 26.5 billion yen ($221.4 million) from a year earlier thanks to an aggressive five-year growth plan launched in 2000.

"Mazda's marketing strategy is still very weak," Koshi Kumagai, senior fund manager at HSBC Asset Management said. "The RX-8 may be good, but you can't change Mazda's brand image overnight."

LIKE NO OTHER?

Mazda is betting on the RX-8's four doors appealing to customers who had previously not considered a sports car.

"It's the ideal car for active customers who wanted a sports car but had been unable to own one because of the needs of their families and friends," Mazda President Lewis Booth told a news conference at the launch.

Powered by the auto maker's "Renesis" rotary engine, the RX-8 is 20 percent more fuel efficient than its predecessor, the RX-7, but has upwards of 210 horsepower.

The RX-8 is priced at $25,180 in the United States and as low as 2.4 million yen ($20,050) in Japan.

That's much cheaper than most industry watchers had expected, and compares with more than three million yen for the Fairlady Z, made by Nissan Motor Co., and about four million yen for the Audi TT from the luxury unit of Volkswagen AG.

Customers may also be drawn by the lower insurance costs that come with having four doors instead of the conventional two for sports cars.

UNIQUELY MAZDA

The RX-8, being built in Mazda's home of Hiroshima in western Japan, goes on sale in Japan later this month and the rest of the world this summer. It will be sold in about 30 countries.

Due to the relatively low production size -- Mazda aims to sell about 60,000 units a year globally, with half the sales coming from the United States -- analysts said the RX-8 won't contribute much to Mazda's overall sales volume.

But it is strategically important because of the possible boost to Mazda's image and showroom traffic.

In Japan, where Mazda hopes to sell about 1,000 units a month, the RX-8 has already collected 5,000 pre-launch orders.

In North America, more than 130,000 potential customers have requested information on the car, a company official said.

If that keeps up, the RX-8 could do for Mazda what the Miata did for the struggling company in 1989. That roadster was an instant hit in the United States, helping the small auto maker gain recognition and status in the world's biggest car market.

"There's a very clear product strategy that's now in place at Mazda, not only in terms of design but in terms of technology and performance," Usher said.

"We remain confident that Mazda will deliver slightly ahead of expectations (in the just-ended business year) and that this year, they're going to take the next step in restoring more competitive levels of profitability."