Changan Mazda Axela makes Chinese market debut

Gasgoo.com (Shanghai May 29) - Changan Mazda's most important model of the year, the Axela, has officially made its Chinese market debut, the National Business Daily reported today. As Changan Mazda's key model, the joint venture aims to sell 5,000 vehicles every month.

According to statistics from the China Passenger Car Association (CPCA), Changan Mazda sold a total of 25,100 vehicles from January to April, with the CX-5 SUV accounting for 19,600 of those sales. Sales of the Mazda3 and Mazda3 Xingcheng combined totaled just 5,451 vehicles.

The Axela (pictured), along with the CX-5 and the upcoming redesigned Mazda3 Xingcheng to be released in September, will play an important role in helping Changan Mazda achieve its goal of 100,000 vehicles sales this year. A representative from the JV explained that the 100,000 sales mark is very important for Changan Mazda. When asked about the target, Changan Mazda Executive Vice President Zhou Bo said that "the [target] will not change", adding that he is confident that the JV will achieve it.

According to the National Business Daily, the Axela will account for 35 percent, or 35,000 units, of the total 100,000 vehicles Changan Ford aims to sell this year, while the CX-5 will make up 55 percent. The remainder of the target will be of Mazda2, Mazda3 and Mazda3 Xingcheng sales.

According to CPCA monthly statistics, the CX-5's total monthly sales were 4,911 units. If Changan Mazda is able to maintain this sales volume, it should easily be able to fulfill its part of the yearly sales target. A Beijing-based Changan Mazda dealer commented that their shop is generally only able to successfully sell CX-5s, whose prices are very stable.

Commenting on Changan Mazda's lackluster sedan sales performance over the first four months of the year, in which the JV sold only 5,451 sedans, Mr. Zhou explained that halting manufacture of the Mazda3 and Mazda3 Xingcheng, whose productions stopped in last December and this February respectively, has led to a lack of sedan models before the JV unveils redesigned models later this year.

"In the future, the Mazda2 will cover the 70,000 RMB to 90,000 RMB ($11,341-$14,582) subcompact segment and the Xingcheng will cover the 90,000 RMB to 110,000 RMB ($14,582- $17,822) subcompact segment, while the 110,000 RMB to 160,000 RMB ($17,822-$25,923) market will be covered by the Axela," the previously-mentioned Beijing dealer explained.

When asked how difficult it will be for Changan Mazda to sell 35,000 Axelas this year, a representative from the JV replied it will not pose a challenge. The representative mentioned that the JV has already achieved its monthly target of 5,000 sales via preorders, which opened on April 20. If the JV is able to sell 4,000 Axelas monthly until the end of the year, it will be able to achieve the 350,000 sales target.

Changan Mazda is very confident in future market prospects for the Axela. Changan Mazda Marketing and Sales Vice President and President of the JV's subsidiary sales company Teng Qiaoren made the following statement on the topic: "The CX-5's monthly sales volume of 5,000 units [shows that it has gained recognition among Chinese consumers]. The Axela, being the first Changan Mazda sedan to use SkyActiv technology, will similarly be able to gain Chinese consumers' recognition."

However, an anonymous Changan dealer still has his doubts, pointing out that there are many available choices for consumers searching in the subcompact market and that the Axela may not have a lot of space to compete in. "This is a car that can bring in a lot of profits, but it is hard to predict what its sales will be like," the dealer said.

A consumer at a recent Mazda-organized promotional test drive event shared her opinions. She is a first-time buyer who has previously considered the Honda Civic and Chevrolet Cruze. What attracted her to the Axela is its exterior design, however compared with the Civic and Cruze, she feels the Axela is a little too expensive.

When asked about the Axela's selling price, a Changan Mazda representative explained that it was decided following a comprehensive evaluation of its advanced technology. The representative added that the Axela is meant to compete with the Ford Focus and VW Sagitar.

Some analysts maintain that for the Axela to become a leading choice for consumers in first- and second-tier cities in the country, Changan Mazda will have to emphasize how its exterior styling is superior to European and American models, while also pointing out its more sporty nature when compared to offerings from fellow Japanese manufacturers.

However, given the heavily competitive nature of the subcompact segment, brand awareness is of the utmost importance. Analysts believe that, when compared with competing models, the Axela lacks a strong brand image. Since Changan Mazda is aiming at a more premium market, it is key for them to emphasize the model's uniqueness and sportiness.

In addition to its sales goal for this year, Changan Mazda has outlined a strategy it dubs '2030', in which it aims to sell 200,000 vehicles in 2015 and 300,000 vehicles in 2017. Many analysts believe that, judging from the JV's current progress and the state of the automobile market in China, it will be very difficult for them to fulfill this strategy. In order to reach these targets, the JV is undertaking projects to develop its brand and expand its network.

Kuang Jinwen, executive vice chairman of Changan Mazda's subsidiary sales company, revealed that the JV will expand its current network of 196 dealerships to around 220 dealerships by the end of this year. Another source from the JV added his insight, saying that as the brand's products become more competitive, Changan Mazda will focus more on network expansion.