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What the Brexit effect could mean to Mazda volume

Jeremy Thomson with Kai Concept at Tokyo Motor Show
Jeremy Thomson with Kai Concept at Tokyo Motor Show

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25 October 2017

 THE embryonic trade deal between the EU and Japan, along with exciting new designs and models, could see Mazda become a real rival to German premium models – although UK volumes could hinge on the Brexit effect.

The EU deal would also make the Japanese brand’s models more attractive to SMEs and end-user fleet business.

Mazda currently has to contend with 10% tariffs as well as a strong Yen which hurts prices and import numbers. A trade deal could well open the door for more imports into the EU from the factories in Japan but for Jeremy Thomson, managing director of Mazda UK, the Brexit effect could throw a spanner in the works.

Speaking at Tokyo Motor Show, he said: “Hopefully we will be able to benefit in the UK from a trade deal between the EU and Japan but at the moment we don’t know what Brexit means. If there is a complete trade break from the EU then hopefully the UK can strike its own deals.”

Taking away the trade tariffs could allow the UK operation to break through its 50,000 sales and 2% market share peaks of the past few years. Thomson said: “We are constantly having to juggle with tariffs and adverse exchange rates which affect our business model and make our cars more expensive for the consumer. A trade deal would certainly level the playing field.

“I can see a real opportunity for growth particularly with the next generation of cars, and to get us on to fleet radars with tax efficient and attractive models.”

Thomson has long since cut back on high cost large fleet business and is more interested in its retail and opportunities with SMEs. “The new designs and cars coming through over the next few years provide a great opportunity to place Mazda as a premium Japanese brand and hopefully move us above 50,000 cars a year.”

However, the direction of travel is currently in the opposite direction.

Thomson expects around 38,000 sales in the current fiscal year ending in March 2018. While this is down from that 50,000 high, he is not too concerned.

“Given the adverse trading conditions, a strong Yen and a weak Pound we will end up where we expected to be. I also expect the market to be down in 2017 and down again next year. What we will not be doing is chasing an unrealistic share of volume. We have positive, structured objectives.”

 

 

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