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Having languished for decades in a crowded field of mass-market nameplates, Mazda will reposition itself as a more premium brand, Mazda Motor Corp. CEO Takashi Yamanouchi said.

"The question is: In the global market, what is the significance of a player with a mere 2%?"
Yamanouchi told Automotive News last week. "It's something we frequently discuss internally. We came to the conclusion that if we make ordinary cars for the mass market, there is no reason for us to exist."

Yamanouchi, a soft-spoken former purchasing executive, wants to boost sales in Mazda's biggest, most important market by 43% to more than 400,000 U.S. units by the fiscal year that ends March 31, 2016. To get to that record level, Mazda will launch a flood of products over the next few years using an upscale brand image.

Internally, Mazda is calling its brand shift "Japan premium." That term will not be used in marketing.

But the strategy is to leverage Mazda's new technologies and styling to lift the company above its Japanese rivals and other mass-market brands.

Some Mazda insiders see the move as the only way Mazda -- a tiny, financially strapped brand with global sales of just 1.3 million units -- can survive.

The 3rd-generation Mazda6 mid-sized sedan, which hits U.S. showrooms in January, will lead the upswing in sales and brand identity.

At the car's launch in Japan last week, Hirotaka Kanazawa, Mazda's global r&d chief, used the term "Japan premium" for its brand positioning, comparing it with German luxury marques.

Mazda's products, exemplified by the redesigned Mazda6, will be packed with cutting-edge environmental and safety technologies and upscale interior materials.

The company's new lineup of Skyactiv technologies will underpin the shift. They encompass a range of chassis, platform and drivetrain systems that save fuel and boost performance.

The Mazda CX-5 compact crossover, which was launched in the United States in the spring, was the 1st vehicle completely remade using the Skyactiv blueprint. Next comes the Mazda6. By 2016, 80% of Mazda's lineup will employ the suite of Skyactiv features.

Mazda is betting the technologies will not only set it apart but enable it to charge more and protect residual values.

"This is a 1st step in going toward premium," Yamanouchi said. "It's about being a brand that has a strong bond with the customer."

Mazda also will stress a few key elements of its new lineup, including:

• Mazda's new kodo design language, which debuted in the CX-5 crossover. In Japanese, kodo means "soul of motion."

• More attention to customer service at dealerships.

• Active safety systems such as precrash warning technologies.

• Diesel drivetrains that are clean and powerful.

• Minimized incentives and maximized residual values.​

"That's how we aim to be like a premium," Yamanouchi said. "Broadly speaking, it is not to rely on discounts but to have consumers appreciate the value of the product."

Kanazawa said: "With each and every feature and function, we want customers to experience" something "that is well-designed and easy to use."

Mazda is banking on a bevy of products, including redesigns of the CX-9 crossover and Mazda3 sedan. Also coming is a new roadster jointly developed with Alfa Romeo to replace the MX-5 Miata.

The emphasis is on North American production and U.S. sales. A year ago, Yamanouchi said Mazda was looking at reducing the 400,000 target for fiscal 2016. He has since revised his target upward.

"At least 400,000 units," Yamanouchi said of the new U.S. sales goal. "It's a significant jump from current levels."

Mazda is forecasting 280,000 units for the current fiscal year that ends March 31. U.S. sales climbed 9% to 228,104 units through October, but the market rose 14%.

A $500 million factory in Mexico will start producing vehicles in early 2014 and will ensure that Mazda has plenty of local capacity to support the increase without being hit by the exchange rate losses it faces from importing cars from Japan. The plant's capacity, for 140,000 Mazda2 small cars and Mazda3s, will be on top of what is already coming out of Japan -- not a substitute for it, Yamanouchi said.

"In the near future, I think we can make an announcement that increases the capacity of that plant even further," he said.

Brand appeal is critical to the successful repositioning.

Yamanouchi points to Mazda's ranking in Consumer Reports' predicted-reliability study as 1 sign that the brand's value is making a difference with consumers. For the 2nd straight year, it ranked No. 4 of 28 brands -- this time behind Scion, Toyota and Lexus.

Mazda wants dealers to up their game for a share of the spoils.

Despite the predicted 43 percent boom in U.S. sales, Mazda doesn't want more U.S. dealers. The goal: Fatten existing dealers' earnings so they will invest more in their stores.

Said Yamanouchi: "We don't intend to increase the number of stores."
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