Masahiro Moro, the CEO of Mazda Motor Corp., has expressed concerns about the company's business in China due to intense competition in the electric vehicle (EV) market. Moro, who recently embarked on a tour of China, observed that the industry is undergoing a significant transition that will have long-lasting effects. He revealed that the competition in China is much more severe than expected, and as a result, Mazda's sales and earnings in the country are likely to suffer.
Acknowledging the rapid progress of China's EV industry, Moro stated, "China is progressing with a scary speed." He emphasized the importance of his visit to China at the beginning of his tenure as CEO, as it allowed him to witness the challenging landscape firsthand. While Mazda's sales in China declined in April and May compared to the same period last year, Moro affirmed that the company will not give up. Instead, Mazda plans to introduce new EVs in China continuously and has no intention of downsizing.
Mazda has set a target of introducing a sport utility vehicle (SUV) in China by the fiscal year ending in March 2024 in an attempt to reverse its fortunes. Moro expressed a sense of urgency, recognizing the need for Mazda to adapt and succeed in the competitive Chinese market. In the fiscal year ending in March 2023, Mazda sold 84,282 vehicles in China, a significant drop of approximately 50% compared to the previous year.
Mazda's plight in China reflects the challenges faced by other Japanese automakers. Mitsubishi Motors Corp., for example, has indefinitely suspended its China business and plans to lay off staff due to years of poor sales. The shift in China towards cleaner vehicles from gasoline-powered cars has contributed to this situation. However, not all Japanese carmakers have suffered; both Toyota Motor Corp. and Nissan Motor Co. reported higher monthly sales in May.
Despite the difficulties ahead, Moro's determination to navigate the competitive Chinese EV market suggests that Mazda is committed to pursuing success in China. With plans to introduce new EVs and a targeted introduction of an SUV by 2024, Mazda aims to change its trajectory and regain momentum in the world's largest EV market.