Tokyo Motor Show Investors Conference 1 Mazda Motor Corporation Representative Director, Executive Vice President and CFO Kiyoshi Ozaki 2 Presentation Outline Mazda Business Status and Measures to Address Challenges Monotsukuri Innovation: Key Driver of Cost Structure Innovation Environmental and Safety Technologies: SKYACTIV TECHNOLOGY Brand Value: SKYACTIV Introduction Strategy Emerging Markets: ASEAN, China, Central and South America, and Russia Toward Turnaround 3 Mazda Business Status and Measures to Address Challenges 4 Revenue and Wholesales (Billion yen) (000 units) 3475.8 3,500 1,300 Revenue 3247.5 Wholesales 1,240 3,000 2919.8 1,200 2695.6 1,177 2574.7 2535.9 2325.7 1,149 1,116 2,500 1,100 2364.5 1,100 1,104 1,060 1,076 2163.9 2160.0 2094.9 2015.8 2,000 1,000 1,017 964 963 948 1,500 900 (FY March) ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 '12 5 Plan Operating Profit and Operating Margin Operating profit Operating Margin (Billion yen) 158.5 162.1 4.9% 4.7% 135 123.4 82.9 4.2% 70.2 85 50.6 3.1% 2.7% 28.5 2.1% 23.8 35 1.4% (284) 9.5 (14.9) 1.0% 0.0 0.4% (15) 0.0% ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 '11 '12 (FY March) Plan 6 Net Income and Net Income Margin (Billion yen) 73.7 91.8 66.7 2.3% 80 45.8 2.3% 33.9 24.1 1.7% 2.6% 1.3% 8.8 1.0% 30 0.4% (0.9)% (20) (6.5) (0.3)% (19.0) (70) (60.0) (71.5) (2.6)% (2.8)% (120) (155.2) Net Income Net Income Margin (7.7)% (170) Plan 7 (FY March) ’01’02’03’04’05’06’07’08’09’10'11'12 Equity Ratio Trend 507.9 (Billion yen) 473.4 552.2 413.1 428.8 Equi ty 398.0 Equi ty Ratio 267.8 222.6 28 % 26 % 194.0 25 % 24 % 22 % 23 % 22 % 15 % 11 % 12 % (FY March) 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 (Forecast) 8 Sales Performance in Major Markets Fiscal years ended in March Japan USA Europe 295 327 322 304 279 286 287 281 2.0% 2.0% 273 268 270 273 1.9% 282 1.7% 261 256 258 255 264 262 250 1.9% 239 1.6% 1.7% 240 238 1.5% 1.5% 212 221 1.6% 4.7% 4.9% 4.9% 4.8% 219 1.5% 1.5% 1.5% 195 1.4% 1.4% 4.6% 4.6% 4.6% 206 210 1.4% 1.3% 159 4.6% 1.2% 4.5% 4.5% 1.1% 0.9% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 China Canada Australia Total volume share 1.9% 2.1% 84 89 1.9% 80 81 8.0% 8.2% 8.4% Share excl. Hainan vol. 236 7.5% 1.7% 75 75 70 70 69 71 6.8% 5.2% 5.3% 5.2% 6.6% 80 87 1.4% 196 5.0% 5.0% 77 4.8% 5.9% 6.1% 79 4.6% 4.4% 67 4.3% 4.2% 5.2% 65 1.1% 59 1.3% 4.4% 55 130 129 135 1.3% 43 0.7% 90 96 101 35 0.9% 0.7% 0.7% 0.2% 0.6% 26 6 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 9 Sales volume (000 units) Share Business Status After introductions of Zoom-Zoom products, our presence has steadily improved in major markets Our approach to sell at full price is producing good results, and our brand value has consistently improved Our actions to cope with Lehman Shock and Great East Japan Earthquake were quick and appropriate leading to early recovery SKYACTIV TECHNOLOGY (PT) has been receiving great responses since its debut in Demio in Japan and Mazda3 in North America However, due to continued yen’s appreciation and a series of disasters, our business performance is affected. 10 Mazda Business Challenges Mazda’s structural challenges Mazda possesses excellent R&D and production technologies, as well as highly-efficient plants and suppliers centering in Hiroshima and Yamaguchi, and has established a certain presence in developed countries in terms of sales Production and Procurement Structure: ‐Inadequate ability to respond to yen’s appreciation due to delays in expansion of overseas production footprint ‐Low utilization ratio at AAI, our only production site in USA Sales: ‐ We focused on developed countries and entrance into growing markets has been limited (Generally, due to high tariffs in growing markets, price is not competitive without production sites) ‐ Threats of FTA/Korean makers Finance: ‐ Financial base still needs improvement 11 ‐ SKYACTIV introduction and contribution to profits are on track. But it takes time Measures to Address Challenges Toward Growth (1) Measures to overcome the current crisis by offsetting exchange impact - Identify every opportunity to increase profits such as sales expansion, price increase, and mix improvement - Reinforce cost improvement initiatives together with suppliers (Thorough reassessment of costs of existing models) - Accelerate increase of overseas sourcing ratio and transactions in foreign currencies - Thorough reassessment of fixed cost (Reduce overtime work and recruitment, etc.) 12 Measures to Address Challenges Toward Growth (2) Turnaround toward mid- and long-term growth - Globally introduce new-generation products that fully reflect KODO design and are powered by advanced technology, SKYACTIV - By accelerating “Monotsukuri Innovation”, further improve costs of existing and new-generation products and improve productivity at domestic plants - Progress of Tsunagari innovation and Sales method innovation with introductions of SKYACTIV - Increase sales in ASEAN and other emerging markets - Through construction of new plants in Mexico, capacity increase at Nanjing plants and joint venture production in Russia, expand production capacity at overseas plants and increase local sourcing ratio 13 Framework for Medium- and Long-term Initiatives Framework for Medium- and Long-term Initiatives 5 pillars Monotsukuri Innovation Environmental & Safety Technologies Brand Value Emerging Markets Ford Synergy 14 Monotsukuri Innovation Key Driver of Cost Structure Innovation 15 Monotsukuri Innovation Common Architecture R&D Concept 16 Monotsukuri Innovation Performance Improve Cost/Efficiency R&D Efficiency 30% or more Investment in SKYACTIV-G 60% or more Production Facilities VEHICLE 20% or more VEHICLE 100 kg or more weight reduction VEHICLE (equivalent to 5% fuel economy 25% level or more (excl. additional equipment) improvement) 20% better fuel economy / SKYACTIV-D Better than current engine Cost SKYACTIV-D Euro6 compliance Improvement 15% better fuel economy and torque. Better than current direct- SKYACTIV-G Possible to comply with Euro6 injection engine 4-7% better fuel economy. Same as current SKYACTIV-DRIVE Direct feeling improvement transmission 17 Environmental and Safety Technologies SKYACTIV TECHNOLOGY 18 Sustainable Zoom - Zoom Aim to further improve average fuel economy by 30% through development of super-efficient new-generation powertrain and light-weight new-generation platform 19 Building Block Strategy 20 *Hybrid vehicle with a battery that can be charged with household power supply Fuel Economy Improvement by SKYACTIV New-generation GE New-generation DE New-generation AT Reduce weight by 100 kg or more from prior models 21 New Mazda Demio (Mazda2) ・ Sharp and strong design ・ Eco-friendliness & Fun to Drive = “i- DM” ・ Best-in-class safety feature ・ SKYACTIV-G 1.3 with high compression ratio (14:1) won 2012 RJC Technology of the Year ・ Demio 13-SKYACTIV won “Chairperson's Award, Eco-Products Awards Steering Committee” SKYACTIV-G 1.3 equipped with i-stop Fuel Economy of 30km/L (10-15 mode) 25km/L (JC08 mode) 22 New Mazda Axela/Mazda3 ・ New sense of direct driving ・ Eco-friendliness & Fun to Drive = “i-DM” ・ Realized both exhilarating driving performance and class-top fuel economy SKYACTIV-G 2.0 SKYACTIV-Drive (6-speed AT) equipped with i-stop Fuel Economy of 40 mpg (US Highway mode) 20.0 km/L (10-15 mode) 17.6 km/L (JC08 mode, Sedan) 23 Mazda CX-5 New Design Theme “KODO - Soul of Motion”× First Model of Mazda New Generation Products 24 to be fully equipped with SKYACTIV Mazda CX-5 / SKYACTIV-D New-generation Clean Diesel To be introduced in Japan in 2012 25 Mazda CX-5 / SKYACTIV-D World’s Lowest Compression Ratio of 14:1 Without expensive NOx after-treatment Meet Post New Long-term Emissions Regulations 26 Mazda CX-5 / SKYACTIV-D Improve fuel Fuel Economy economy about 20% 18.6Km/L (JC08 mode) from prior model Top among all SUVs - SKYACTIV-D (2.2L) - SKYACTIV-Drive (AT) -i-stop 27 Mazda CX-5 / SKYACTIV-D Adopts two-stage turbo charger Linear response from low to high engine speeds As same as 4-liter V8 GE Maximum Torque 420Nm 28 SKYACTIV-G - 15% improvement in low-mid range torque - 15% improvement in fuel economy - Reduced pumping loss - Reduced weight and mechanical friction [Environmental performance of CX-5/SKYACTIV-G 2.0] - 16.0 km/L (JC08) - 17.6 km/L (10-15) 29 Environmental and Safety Technologies Introduction of environmentally-friendly vehicles is on track (1) Jun. 2011・・ Introduced new Demio equipped with SKYACTIV-G in Japan, achieving fuel economyeconomy of 30km/L without an assistance of electric devices and received high acclaim (2) Sep. 2011・・ Started sales of new Mazda3 with SKYACTIV-G and SKYACTIV-Drive in Japan, North America and Australia (3) 2012 ・・・・・・ Globally launch the CX-5 fully equipped with SKYACTIV TECHNOLOGY (4) From 2012・・ Introduce regenerative braking system “i-ELOOP” (5) 2012・・・・・・ Start leasing electric vehicles (6) 2013・・・・・・ Start sales of hybrid vehicles 30 Brand Value SKYACTIV Introduction Strategy 31 Brand Value - Product Line-up Since 2002 Premacy Axela Atenza Demio Roadster Premacy Axela Atenza 32 Improvements of Brand Value in Major Markets Brand Value and Residual Value Improved in Main Markets USA ALG Top Residual Value Award: Mazda3 (2010 MY) CX-9 (2011 MY) Mazda3 MPS (2012 MY) J.D.P IQS: Brand 5th (from 18th prior year) J.D.P APEAL: Mazda2 2nd Europe J.D.P VOSS (Germany): Mazda2 1st Mazda3 1st (2 consecutive years) China J.D.P IQS: Mazda6 1st (2 consecutive years) ： J.D.P： J.D.