Mazda Motor Corporation, a third owned by Ford, plans to reduce its inventories in the US to 90 days or less as the company offers more competitive leasing prices, Mazda president Lewis Booth said on Thursday, according to a Bloomberg News report in the Detroit News.
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“We’ve really struggled since the back end of last year; our sales have been disappointing,” Booth reportedly said in an interview. “I want to be at 90 days or below, and sooner rather than later,” he said, declining to be specific on the timing.
Citing Booth, Bloomberg said that Mazda, Japan’s fifth-largest car maker, has about 105 days’ worth of inventories in the US which are mainly Mazda 6 sedans, Booth said.
Sales of the model, released in late December 2002, stumbled initially because the company’s leasing prices weren’t as competitive as those of rivals such as Honda ‘s Accord sedan and Toyota ‘s Camry, Booth reportedly said.
Bloomberg News said that Mazda, which relies on North America for more than a third of its sales and has 1.4% of that market, is fighting to win new customers and compete against larger rivals with its first new model in the market in two years as larger US-based rivals add incentives and demand falters. Mazda’s sales in the world’s largest car market have dropped 4.7% since January, the report added.
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By GlobalData“High inventory leads to higher incentives, so in order for Mazda to improve quality of sales, it needs to better control its inventory levels,” Kurt Sanger, an analyst at ING Securities Japan, told Bloomberg News. “We would like to see Mazda closer to the industry average (of about 60 days) over the next quarter.”
Mazda’s incentives in the US average about $US2,000 a vehicle, compared with larger rival Honda, which said it budgeted for about $200 a car in the January to March quarter, the Bloomberg News/Detroit News report said.
