Electrification is difficult, and perhaps more importantly, expensive – especially for smaller carmakers. By volume, Mazda is definitely on the “smaller” end of the equation – the Japanese carmaker uses the term “niche”. And in a time when legacy carmakers continue to struggle with the transition to electrification no thanks to fluctuating customer demand for electric vehicles (EVs), plus ongoing inflationary pressure in part due to the volatile geopolitical climate, cost-cutting changes are required – sometimes in a bid for survival.
For Mazda, that’s in the form of the new ‘Lean Asset Strategy’, which it announced during the brand’s recent Multi-Solution Briefing Session.
Mazda’s plan essentially involves putting the company through a ‘diet’, prioritising efficiency, flexibility, and speed to meet future software development demands, whilst also reducing investments in EV batteries. It plans to do all these by utilising its existing partnership agreements and assets.
The company states that EV batteries require a huge investment. In a November 2022 announcement, Mazda estimated costs exceeding JPY 750 billion (approx. RM22.35 billion), based on its original plan to procure the batteries independently.
Thanks to the ‘diet’, the initial estimate of JPY 750 billion has been halved, courtesy of Mazda’s partnership with China’s Changan Automobile. The companies are jointly developing battery electric vehicles (BEVs) – including the Mazda 6e – which are projected to comprise 25% of its BEV global market by 2030, or approximately 400,000 units, according to Mazda.
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In addition to Changan Automobile, Mazda is also collaborating with Toyota, Denso, and Blue Nexus to develop electric/electronic architectures and platforms, advanced driver-assistance systems (ADAS), and electric powertrains.
Without these collaborations and partnerships, Mazda estimates its EV investments as a whole would reach two trillion yen. However, the company has revised this figure to 1.5 trillion yen through its optimisation of battery investments.
As part of its strategy unveiled on Tuesday, the Japanese carmaker will also be unveiling a new EV in 2027, which it will build on an existing production line on which it already makes cars powered by internal combustion engines.
The utilisation of existing production facilities is a key part of its new “Monozukuri Innovation 2.0” production framework. By sharing a production line instead of building a new dedicated BEV factory, Mazda is able to reduce its initial capital investment by 85%, while reducing the preparation time for mass production by 80%.
Through its existing collaborations and partnerships, Mazda also expects to reduce the development investment by some 40%, and halving the development man-hours.
On the business end of internal combustion engines, Mazda also announced that the new Skyactiv-Z engine will make its debut on the next generation CX-5, which is now slated for release in 2027 with the company’s unique hybrid powertrain. Additionally, the marque’s legendary rotary engine will also be revived on the Mazda MX-30, to function as a range extender.
However, as part of the overall cost-cutting measures, the company will also be reducing the number of engines in its line-up – which currently includes the Skyactiv-G, D, and X – by half, and its control software by two-thirds.
Time will tell if Mazda’s electrification adaptation plans or its ‘diet’ will be effective. The automotive industry is a ruthless business, and Nissan’s ongoing struggles demonstrate how challenging it can be.
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