In November 2023 Mazda Southern Africa was targeting a medium-term annual sales market of 5,000 for its cars in South Africa. Seventeen months on, MD Craig Roberts thinks the Japanese brand may have to lower its immediate sights.
Having reduced dealership numbers from 53 to 33, he suggests a more realistic target is 3,300 sales — an average of 100 per dealer. It’s a doable number: according to motor industry association Naamsa, 3,027 Mazdas were sold here in 2024 and 750 in the first three months of this year.
Nevertheless, the lowered expectations are a direct consequence of the growing influence of Chinese brands in the local market. In the past two years particularly, these have made strides in grabbing market share. Haval and Chery are significant players, and more are joining the fray.
This invasion has caused Mazda, like other imported brands, to reconsider its market positioning, says Roberts. A few years ago it was a major player in South Africa, its cars and bakkies manufactured on the local Ford Southern Africa assembly lines. But when Ford became an exclusive Ranger bakkie manufacturer in 2011, Mazda became an imported brand.
Once associated mainly with cheap cars, Mazda these days is a producer of medium-range vehicles, particularly SUVs. Until recently it occupied what Roberts calls the sub-premium segment of the market — its cars offering similar performance and features to those of (mainly German) premium brands, but at lower prices.
In principle, Mazda vehicles still do that, but not only is this market now overcrowded with Chinese and other newcomers, the whole market dynamic has changed as cash-strapped consumers buy smaller and cheaper cars.
With the exception of three small models, Mazda prices range between R417,000 and just over R1m. in a market where two-thirds of new car sales are below R400,000, that creates an obvious challenge.
It’s one of the reasons Mazda has cut dealership numbers. “Too many of our locations did not fit the necessary profile,” says Roberts.
While he hasn’t given up on the earlier 5,000 annual sales target — “more customer inquiries are translating into actual sales and there is a definite air of positivity”— he adds: “I don’t think sales growth opportunities are substantial, because of the market’s dynamics. We want to stabilise at a level that we think is sustainable and allows us to be profitable in South Africa.” It’s less about volumes than about margins.
In its local heyday, Mazda’s biggest seller was the BT-50 bakkie, which was built on the same assembly line as the Ford Ranger, but outsold its sibling. A new BT-50 is being made in Thailand and sold in other countries, but Roberts says it’s unlikely to be seen here.
We have legacy and history and reputation. Customers know us
— Craig Roberts
There was discussion about importing kits for local assembly but that came to nothing. So did the idea that the vehicle should be manufactured locally by Isuzu South Africa, whose D-Max bakkie is built off a similar floor plan. It would not have been the first time for such an alliance: Ford Southern Africa builds Volkswagen’s Amarok bakkie for the local market.
Local assembly would allow Mazda to reduce prices substantially. Roberts says import duties, emissions taxes, VAT and other government extras add more than 40% to vehicle costs.
Some of this can be mitigated by buying import-duty credits from local vehicle manufacturers. Under the government’s automotive policy, manufacturers can use production incentives — known as production rebate credits (PRCs) — to offset duties on own-brand imported vehicles. In most cases, credits far outweigh the value of import needs, so companies sell their unused PRCs, at a reduced rate, to other importers.
The irony of a system that helps importers undercut the prices of local producers is not lost on the industry, and the government is being asked to allow manufacturers to use excess PRCs to reduce their own retail prices.
Roberts understands their reasoning, but would hate to see the change, which would heap more price pressure on importers. “Brands like ours are reliant on PRCs,” he says.
Mazda’s local strategic restructuring has been under way since 2023. Roberts believes it could take another two years to complete.
In Mazda’s favour is that it is a familiar brand in South Africa. Even if its current model range is very different from that of a few years ago, “we have legacy and history and reputation”, says Roberts. “Customers know us.”
They can also be pretty confident of Mazda resale values — something lacking for many Chinese brands that have not been here long enough to build a track record.
Mazda Southern Africa is 100% Japanese-owned — 70% by Mazda Motor Corp and 30% by retail distributor Itochu.
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