Mazda's new deal with Alfa will help both makers develop new sports cars - including a replacement for the current Mazda Miata.
Little Mazda is lining up some big partners.
Struggling to regain its footing after the collapse of its decades-old alliance with Ford Motor Co., the Japanese maker has been looking for new opportunities and, in recent months, it has inked several potentially lucrative deals that could help it flesh out its product portfolio and shore up its bottom line.
The latest deal pairs Mazda with Alfa Romeo, the struggling subsidiary of Italy’s Fiat SpA. Last week, the two confirmed that Mazda will use one of its Japanese assembly plants to produce a new sports car both for its own dealers as well as Alfa’s.
Separately, Mazda has signed a deal with Toyota that will see the smaller maker produce vehicles for the Japanese giant at a new factory in Mexico.
“I think you’re going to see us do more alliances where it fits the brand,” Jim O’Sullivan, CEO of Mazda’s U.S. subsidiary, tells TheDetroitBureau.com.
Mazda has long struggled to claw its way out of the second tier of Japanese automakers, nearly destroying itself in the process on at least one occasion. That led its long-time American ally, Ford Motor Co., to take control during the 1990s and going as far as appointing its own managers to run the Japanese maker.
But the ties that bound the two companies have been all but severed since Ford CEO Alan Mulally came onboard seven years ago. Ford has reduced its stake in the Japanese maker to just 3%. It no longer has any management say and the two makers have stopped joint product development efforts.
That hasn’t been an easy shift for Mazda, which counted on Ford’s help to offset the hefty cost of developing products in today’s fast-changing market. The timing was a particular challenge as Mazda worked up its distinctive SkyActiv technologies which, in the past, it might have hoped to share with Ford.
Mazda CEO CEO Takashi Yamanouchi has openly said his company is “actively” looking for alliance partners.
And now it appears to have found several. Last November, it announced it will work with Toyota to develop a replacement for the bigger maker’s Yaris minicar, sharing the same platform as the small Mazda2. Meanwhile, the new will be produced alongside the Mazda2 at the factory Mazda is now building in Mexico.
Last year, Mazda walked away from the assembly plant it had long shared with Ford in the Detroit suburb of Flat Rock, shifting production of the next-generation Mazda6 back to Japan. The move left it with no North American production base at a time when lopsided exchange rates are making imports from Japan more expensive – and less profitable – than ever.
The new Mexican plant will help offset that issue which is particular problematic on small cars that have minimal profit margins in the first place. But considering the relatively modest demand for cars the size of the Mazda2 in the U.S., analysts had been wondering how the small and struggling Japanese maker would justify the hefty cost of the new facility.
Toyota will now help justify the cost of the plant and help keep it busy.
Alfa, meanwhile, will help Mazda keep things rolling back in Japan. The Fiat subsidiary is partnering with Mazda to develop a new 2-seat sports car that both makers can market – a deal similar to the one that Toyota inked with Subaru.
For Mazda, it will provide a way to help subsidize the development of the next-generation Miata. For Fiat, it will help expand the Alfa Romeo line-up as the Italian brand prepares to re-enter the critical U.S. market.
According to Mazda’s O’Sullivan, the Hiroshima-based maker yet may line up some more alliance plans. But they will be markedly different from the approach Mazda took in the past. Expect to see program alliances, he explains, “rather than equity alliances.”
Mazda may be looking for help but it doesn’t want to tie its future up with one partner, as it did in the past with Ford.