2006 Social & Environmental Report

Social & Environmental Report 2006 The Origin and Meaning of “Mazda”

The company’s name, “Mazda,” derives from Ahura Mazda, a god of the earliest civilizations in western Asia. We have interpreted Ahura Mazda, the god of wisdom, intelligence and harmony, as a symbol of the origin of both Eastern and Western civilizations, and also as a symbol of automotive culture. It incorporates a desire to achieve world peace and the development of the automobile manufacturing industry. It also derives from the name of our founder, Jujiro Matsuda.

Mazda Brand Symbol (Established in June 1997)

The brand symbol expresses Mazda’s dedication to continuous growth and improvement. It is a symbolic development of the Mazda “M”, and shows the company stretching its wings as it soars into the future.

Mazda Corporate Mark (Established in 1975)

With the introduction of CI (Corporate Identity) in 1975, Mazda developed its corporate mark as a symbol for Mazda’s communications. It was then positioned as an easy-to-read corporate mark in line with the establishment of the brand symbol in 1997.

1 Social & Environmental Report 2006 Mazda Group Profile (As of March 31, 2006)

Corporate Profile

Company name: Mazda Motor Corporation Establishment: 1920 Representative: Hisakazu Imaki, Representative Director, Chairman of the Board and President Head Office: 3-1 Shinchi, Fuchu-cho, Aki-gun, Hiroshima, 730-8670 Japan Main business lines: Manufacture and sale of passenger and commercial vehicles Principal products: Four-wheel vehicles, reciprocating engines, diesel engines, diesel engines, rotary engines, vehicle automatic and manual transmissions Number of employees: 18,995 (non-consolidated), 36,626 (consolidated) Research and development bases: Head Office, Mazda R&D Center Yokohama, Mazda Motor of America (USA), Mazda Motor Europe (Germany), China Engineering Support Center (MCO) Production bases in Japan: Hiroshima plant (Head Office, Ujina), Plant (Nishinoura, Nakanoseki), Plant Overseas production bases: United States, China, Taiwan, Vietnam, Thailand, Malaysia, Philippines, India, Iran, Spain, Kenya, Zimbabwe, South Africa, Ecuador, Colombia Sales companies: 304 in Japan, 132 overseas Major industry association memberships: Japan Automobile Manufacturers Association, Inc., Japan Mini Vehicles Association, Society of Automotive Engineers of Japan, Inc., Automobile Business Association of Japan, Japan Auto Recycling Partnership (See pages 43-44 for business performance data.)

Main Subsidiaries and Affiliates

Domestic subsidiaries: Mazda ., Inc./ Kurashiki Kako Co., Ltd./ Toyo Advanced Technologies Co., Ltd./ Microtechno Corp./ Mazda Ace Co., Ltd./ Mazda Engineering & Technology Co., Ltd./ Mazda Chuhan Co., Ltd./ Malox Co., Ltd. Domestic affiliates: Japan Climate Systems Corporation/ Yoshiwa Kogyo Co., Ltd./ FC/ Mazda Processing Chugoku Co., Ltd. Overseas subsidiaries: Mazda Motor of America, Inc./ Mazda Canada Inc./ Mazda Motor de Mexico, S. de R.L. de C.V./ Mazda Motor Europe GmbH./ Mazda Motors (Deutschland) GmbH./ Mazda Motor Logistics Europe N.V./ Mazda Motors UK Ltd./ Mazda Automobiles France S.A.S./ Mazda (Suisse) S.A./ Mazda Automoviles Espana, S.A/ Mazda Motor de Portugal Lda./ Mazda Motor Italia S.p.A./ Mazda Motor Rus, OOO/ Mazda Austria GmbH./ Mazda Sales (Thailand) Co., Ltd./ P.T. / Compania Colombiana Automotriz S.A./ Mazda Australia Pty Ltd/ Mazda Motors of New Zealand Ltd./ Mazda Motor (Shanghai) Business Management & Consulting Co., Ltd. Overseas affiliates: AutoAlliance International, Inc./ AutoAliance (Thailand) Company Limited/ FAW Mazda Motor Sales Co., Ltd./ Changan Ford Mazda Automobile Co., Ltd./ Changan Ford Mazda Engine Co., Ltd.

Europe Asia Production facilities (1) Production facilities 4(7) Distributors 28 Distributors 14 North America Dealerships 2,516 Dealerships 554 Production facilities 1(2) Distributors 3 Middle East Japan Dealerships 878 Production facilities (1) Production facilities 3(4) Distributors 12 Distributors 304 Central and Dealerships Dealerships 1,156 South America 191 Production facilities 1(1) Africa Oceania Distributors 40 Production facilities (3) Distributors 14 Dealerships 329 Distributors 21 Dealerships 185

Dealerships 233 ( ) Includes unconsolidated affiliates The History and Spirit of Mazda

Dedication to Technology and 1931 Contributions to Regions Start of three-wheel truck production Mazda’s first vehicle was the three-wheel truck, Mazda was established in 1920 as Toyo Cork Kogyo, Ltd. “Mazda-go”. 66 units were manufactured the first year. The company changed its name to Toyo Kogyo Co., Ltd. in 1927, and started production of its first three-wheel truck in 1931, based on its accumulated mechanical expertise. This milestone was the foundation for future 1960 growth to evolve into all-round automaker. Coupe introduced This lightweight four-seater had a 356cc air-cooled At the time, the engines mounted in three-wheel trucks 2-cylinder OHV engine (16 HP). Its thorough weight-reduction design gave it 32 km/liter mileage. were almost all imported. Mazda emphasized R&D in its efforts to achieve a totally Japan-built-product. As the company has grown, we have benefited greatly from the geographical advantages of our base in Hiroshima. For 1967 example, the area’s history in steel processing and Launch of the Mazda Cosmo Sports, the world’s first rotary engine vehicle shipbuilding technologies has spawned a wealth of new The Cosmo Sports was a two-seater with a newly-developed two- rotor (491cc each) rotary engine (110 HP). It delivered a top speed technologies and produced a pool of technically skilled of 185 km/h and a 0-400m meter acceleration of 16.3 seconds. personnel. 1978 Mazda’s Role in Recovery from Postwar Mazda Savanna RX-7 introduced Devastation Developed under the basic theme of “pursuing the sheer joy of driving,” the front-mid-mounted 12A-type 2-roter rotary engine (130 HP) provided the Savanna An atomic bomb was dropped on Hiroshima on August 6, RX-7 with excellent handling and stability. 1945. Toyo Kogyo (the company name at the time) ceased all production activities. The company immediately opened all facilities and its stock of medical and other supplies to 1980 the public. In addition to company-wide rescue efforts, on wins “Japan of the Year” August 7, early the following morning, we established four emergency stations throughout the city of Hiroshima to provide assistance to victims and to facilitate contact between employees and their families. Mazda is firmly rooted in this community, and we believe 1989 in contributing to the communities where we live and work. Roadster (Mazda MX-5) Released The Eunos Roadster was released as an authentic lightweight Since its foundation, Mazda has cultivated this belief. , in further pursuit of the joy of driving. This highly successful product proved to be extremely popular in North America prior to its release in Japan. A Globally Unique Rotary Engine Manufacturer 2003 The continuously-rotating internal combustion engine Launch of the 4-door, 4-seater sports car, invented by Felix Wankel of Germany in 1919 was the first Mazda RX-8 rotary engine. Compared to standard reciprocating RX-8 wins “2004 RJC Car of the Year” engines, it rotated smoothly, and the extremely simple China Car of the Year award to structure meant a very low parts count. Reduced /Atenza The Mazda6 mid-size sedan (Mazda Atenza in vibration and noise and its other characteristics soon Japan) was named 2004 Car of the Year by Motor Trend China magazine (a sister publication of Motor attracted enough attention for the engine to be developed Trend magazine in the US). for practical applications, with more than 100 companies worldwide expressing interest in technological tie-ups. In 1961, we entered into negotiations with NSU and Wankel GmbH concerning collaboration in rotary 2005 technologies. Thereafter, Mazda overcame a host of Launch of the all-new Mazda Roadster (Mazda MX-5) technological obstacles and launched the Cosmo Sports The all-new Mazda Roadster wins the in May 1967, the world’s first car to run on a 2-rotor rotary 2005-2006 Japan Car of the Year award engine. This created the solid foundation behind Mazda’s technology, which has earned high a high degree of trust across the globe, and was also the starting point of the 2006 “Zoom-Zoom” spirit of exhilaration with and love for things Launch of the all-new MPV in motion.

Web Mazda’s history Note Contents

Mazda has issued an Environmental Report every year Mazda Group Profile/The History and Spirit of Mazda... 1 since 2001, and since FY2004 it has also disclosed social Note ...... 2 ...... responsibility-related data in the form of an annual Social Corporate Vision 3 ...... & Environmental Report. Top Commitment 4 ...... 7 In addition to Mazda’s environmental conservation CSR Efforts ...... 8 activities, this year’s report covers our social responsibility Corporate Governance Corporate Ethics and Compliance ...... 9 efforts in chapters for each stakeholder; customers, Abolition of Human Rights Violations ...... 11 business partners, shareholders and investors, Risk Management ...... 12 employees, regions and communities. Also, the first half of the publication features special articles that quote the opinions and wishes of stakeholders. Mazda and the Global Society 14 Mazda will continue to promote information disclosure, while reinforcing communication with stakeholders. The Conducting Procurement with Regard to ...... 15 accompanying questionnaire is one of several Human Rights and Environmental Concerns communication tools. We would be delighted if it is used Reducing Accidents with Cutting-edge Technologies ...... 17 to pass on candid opinions. Local Cars Built by Local People— Mazda’s Efforts in the Swelling Chinese Market ...... 19 Harmonized information and some differences The Quality Control Group That’s Making .... between the Social & Environmental Report content the Assembly Lines More User-friendly for Women 21 and information placed on the Internet homepage: Detailed information that cannot be included in the Social & Environmental Report and supplementary data are Mazda and the Global Environment 22 posted on the Mazda official website. Flying Higher than Ever—with Hydrogen Providing Data available on the Internet are indicated with a mark Clean Energy, the Rotary Engine Has Evolved ...... 23 in this report. Web Offering Higher Fuel Efficiency, http://www.mazda.com Cleaner Exhaust Emissions and Mazda’s “Fun-to-Drive” Personality ...... 27 The First Coating Technology in the World that .... Organizations covered Simultaneously Reduces VOC and CO2 Emissions 29 Mazda Motor Corporation, its domestic (Japan) affiliates and selected Mazda Develops High-Strength Heat-Resistant overseas group affiliates. Bioplastic for Use in Vehicle Interior Parts in Collaboration with Industry-academia-government ... 31 Period covered The period under review is from April 2005 to March 2006, although some selected activities after April 2006 are included. FY2005 Performance Report 32

Subject areas With Our Customers ...... 33 Social, environmental and economic data are included in the report. With Our Business Partners ...... 41 ...... 43 Reference guidelines With Shareholders and Investors This report was made with reference to the following guidelines: With Our Employees ...... 45 -GRI Sustainability Reporting Guidelines 2002 With Communities and Societies...... 51 -Ministry of the Environment’s Environmental Reporting Guidelines ...... 57 2003 With the Global Environment Mazda Global Environmental Charter ...... 58 Date of publication “Mazda Green Plan 2010” Environmental Mid-term Plan.. 59 August 2006 (The previous report was issued in August 2006; the Overview of Mazda’s Corporate Activities and next report will be issued in summer 2007.) Impact on the Environment ...... 61 LCA Measures ...... 62 Related reports and information ...... For detailed information, accounting and financial data in the “Annual Environmental Management 63 Securities Report”, the “Annual Report” and “Mazda in Brief” are Environmental Accounting ...... 65 available for download from the Mazda official website. Product Development and Research and Development ...... 67 Issuing department/Inquiries ...... Global Communications Planning Department, Reducing the Environmental Impact of Production 77 Mazda Motor Corporation Reducing the Environmental Impact in Phone: +81-82-287-4676 Logistics Operations ...... 81 Fax: +81-82-287-5225 Recycling End-of-life Vehicles ...... 83 Efforts in Offices and at Dealerships ...... 85 ...... 86 Disclaimer Environmental Communications This report includes future projections for Mazda Motor Corporation and its affiliates’ ...... performance based on plans, forecasts, management plans and strategies at the time of Environmental Data 87 publication, in addition to actual past and present facts. Such forward-looking Topics Referenced in GRI Guidelines ...... 92 statements are predictions based on information or assumptions available at the time of ...... edit, and may differ from future operational results due to changes in circumstances. Third-Party Opinion 94

Social & Environmental Report 2006 2 Corporate Vision

Vision Corporate objectives To create new value, excite and delight our customers through the best automotive products and services.

Mission Roles and responsibilities With passion, pride and speed, we actively communicate with our customers to deliver insightful automotive products and services that exceed their expectations.

Value The values Mazda seeks to produce We value integrity, customer focus, creativity, and efficient and nimble action, and respect highly motivated people and team spirit. We positively support environmental matters, safety and society. Guided by these values, we provide superior rewards to all people associated with Mazda.

In 1999, Mazda evolved its existing management philosophy into its current Corporate Vision. Comprising the three key elements of Vision (corporate objectives), Mission (corporate roles and responsibilities) and Value (the values Mazda seeks to produce), this Corporate Vision defines the goals of the company and its employees, their roles and responsibilities, and the sense of values we embrace in pursuit of our targets.

3 Social & Environmental Report 2006 Top Commitment

We aim to satisfy and gain the trust of our stakeholders through operations that provide the best automotive products and services, with consideration for quality, safety and the environment.

Mazda’s basic strategy—to promote We revised our consolidated wholesales target for the manufacture of Zoom-Zoom vehicles FY2006 to 1.21 million units, consolidated operating around the world and gain the trust of income to 135 billion yen and the debt-to-equity ratio to our stakeholders 60% or less. Mazda aims to be an automobile company that is Mazda’s global operations have accelerated since respected and trusted by all our customers and reinforcing our capital tie-up with the Ford Motor stakeholders by: Company in 1996. As of March 31, 2006, overseas sales • delighting customers with cutting-edge products and amounted to 69% of total net sales. This globalization of services imbued with Mazda’s unique creativity and the business forms the basis for our growth. reflecting the Japanese spirit. On the product side, building on new brand strategies • Maintaining a scale of operations that keeps us to highlight Mazda’s originality, the “Zoom-Zoom” brand competitive in the global market. message was adopted in 2002. Zoom-Zoom With this in mind, we outlined our long-term vision in encapsulates the elements of “fun-to-drive” and “the November 2004 to project us through the coming emotion of motion” that we want our customers to be decade and show our commitment to fulfilling our able to feel. Mazda applied its technological prowess corporate and social responsibilities (CSR). and made good use of synergies within the Ford Group At the same time, we developed a mid-term plan, to develop its new generation products, commencing Mazda Momentum, as a stepping stone to realizing this with the all-new Mazda6 (Atenza) that was launched in vision, setting targets of consolidated wholesales of 1.25 2002. The release of the all-new MPV in February 2006 million units, consolidated operating income of 100 marked the replacement of the entire passenger vehicle billion yen, and a net debt-to-equity ratio of 100% or lineup with the new generation products. These vehicles less by FY2006. In FY2005, we reached 1.15 million are characterized by a design that is unmistakably units of consolidated wholesales, 123.4 billion yen in Mazda, performance that outstrips other manufacturers operating income and a 62% debt-to-equity ratio, and superb quality. The all-new Roadster, launched in achieving our targets for income and the equity ratio a August 2005, won the Car of the Year awards in Japan, year early. Australia and New Zealand.

Hisakazu Imaki Representative Director, Chairman of the Board and President, Mazda Motor Corporation

Social & Environmental Report 2006 4 Focusing on producing more environmentally dependent on oil resources and do not produce friendly vehicles, Mazda is pushing environmentally destructive emissions. As the rotary the development of low-emission and engine uses hydrogen as fuel, emissions of CO2 and hydrogen rotary engine cars noxious substances are almost zero. Moreover, it The four cornerstones of the Mazda Momentum provides the same torque, acceleration and driving mid-term management plan are reinforcing research experience similar to an internal combustion engine. and development, strengthening key markets, Our Hydrogen RE vehicle is different from fuel cell enhancing global efficiency and synergies, and leverag- vehicles, which use the reaction between hydrogen ing human resources. We aim to meet our and oxygen to generate electricity to drive a motor. stakeholders’ expectations by implementing these four Mazda’s next-generation low-pollution vehicle does key measures. more than reduce the environmental burden; it is also a Reinforcing research and development involves Zoom-Zoom vehicle full of emotion in motion. bolstering car safety and environmental efficiency; To boost the recyclability of end-of-life vehicles, we specifically reducing the environmental impact of jointly developed a unique paint film removal vehicles on the road and maximizing the recyclability of technology in conjunction with the rice milling and end-of-life vehicles. Climate change is intensifying, and agricultural machinery manufacturer, Satake the global environment is in jeopardy. We believe that Corporation, in 2003. This enables plastic bumpers automobile manufacturers, as good corporate citizens, that had previously been processed as waste to be are obliged to improve vehicle environmental recovered from dealerships and recycled into new performance. bumpers. The development of clean engines that curtail In April 2005, to further reduce the environmental emissions of CO2 and noxious substances is vital to impact of our corporate activities, we revised the reducing the environmental burden of automobiles. Mazda Global Environmental Charter to expand the Currently, Mazda boasts technological expertise in this scope of our activities over the entire Mazda group. field that is among the world’s best. The Mazda Global Environmental Conference was During the first quarter of 2006 (April to June), replaced with the Mazda Environment Committee, and four-star rated low-emission cars accounted for 94% it promotes the introduction of environmental of Mazda’s total passenger vehicle production management systems in our dealerships and parts (excluding OEM vehicles), which exceeds the industry dealers. This system enabled us to push our recycling standard. ratio of waste products in all production processes up Further, in February 2006 we commenced to 99.7% during FY2005, thus reducing the amount of commercial leasing of the Mazda RX-8 Hydrogen RE, landfill waste. the world’s first car which runs on a hydrogen rotary Our future efforts will involve reinforcement of engine. It signifies an important step towards measures under the Mazda Green Plan 2010, our new next-generation low-pollution vehicles that are not environmental mid-term plan.

5 Social & Environmental Report 2006 Top Commitment

As part of “One Mazda,” all employees of more than 140 countries and regions. To respect the group companies are united in fulfilling diversity of our personnel, we will aggressively pursue our social responsibilities measures that show regard for human rights, cultivate human resources, and improve personnel systems and One of the cornerstones of the Mazda Momentum workplace environments. mid-term management plan, the strengthening of key I stress the “One Mazda” concept on a daily basis, markets, involves creating cars attuned to the needs of always working together towards our targets, each region in the world, and bringing the Mazda transcending borders between nations, companies, Zoom-Zoom experience to customers everywhere. divisions, departments and individual roles. In this way, During FY2005, we launched three new models I hope everyone in the Mazda group works as a team including the all-new Mazda MPV, with which we in all steps we take to fulfill our social responsibilities— tapped into the globally growing market. The improving environmental performance, reducing the Mazda6 (Atenza) and (Axela) also continue to environmental load of our corporate activities, fulfilling gain widespread acclaim from customers in Europe, our accountability to our customers, reinforcing North America and Asia, as well as in Japan. In March cooperative relationships with business partners, and 2006, we launched the new BT-50 in building a corporate structure that respects diversity. Thailand, and the new Mazda CX-7 SUV in Mazda’s social responsibility as a corporate the United States in May. As we continue to build enterprise is to provide the best automotive products attractive vehicles like these, we will enhance and services, with consideration for quality, safety and communication with customers throughout the world the environment, that satisfy customers in markets by raising the ratio of exclusive dealerships and worldwide. Through these activities we aim to delight strengthening our sales networks in both domestic and and gain the trust of our stakeholders. overseas markets. The special features, “Mazda and the World Improving global efficiency and synergies promotes Society,” and, “Mazda and the Global Environment,” the streamlining of R&D, procurement, production, on pages 14 to 31 of this publication, aim to cultivate distribution and other operations, which in turn understanding of the measures we are taking to contributes to growth. As we continue to build mutually achieve our CSR goals. They introduce our efforts to beneficial relationships with our suppliers, we aim to operate overseas with consideration for diversity, to improve product quality and hone cost develop automotive safety features and to implement competitiveness. In addition, we will continue our production technologies with reduced environmental Green Procurement activities, and will strongly impact. encourage our suppliers to place the utmost However, the realization of our vision is not importance on compliance with international laws and complete. We must continue to move closer to our the prevention of human rights violations. corporate ideal. In closing, thank you for reading this Developing human resources yields significant report. We always welcome any comments or opinions results. For example, the Mazda Business Leader you may have to offer us. Development (MBLD) program for the development of all employees, which we have run since FY2000, has produced business leaders from all levels within the company, top management down to rank-and-file employees. As of March 31, 2006, we comprise a Hisakazu IMAKI, corporate group consisting of 36,626 employees in Representative Director, Chairman of the Board and President, Mazda Motor Corporation

Social & Environmental Report 2006 6 CSR Efforts

At Mazda, fulfilling our social responsibility means remaining a corporation that is truly beneficial to society and providing the market with unique automotive products and services that keep our customers satisfied, with consideration for quality, safety and the environment.

CSR Committee and Its Roles

In December 2004, the CSR Committee was established to As a subcommittee, the CSR Promotion Team was formed in serve as a review board for corporate and social responsibility April 2006 to enhance the inclusiveness and practicality of (CSR) activities. Chaired by the president, this body determines CSR activities. policies on group-wide CSR activities and implements them.

CSR Committee and Its Roles

Chair: President Vice Chair: Senior Managing Executive Officer CSR Committee in charge of CSR Members: Members of the Executive Committee

Secretariat: General Affairs Department

CSR Promotion Team

Mazda departments Group companies

Relationships with Stakeholders

Shareholders Customers Customer satisfaction and Investors Safety Appropriate return on investment Trustworthy products Corporate governance Appropriate provision of Timely disclosure Mazda Group information

Government and Procurement & Suppliers Administration Strong partnerships Tax payment Cooperation in environmental Legal with law and regulations issues Cooperation with government policies

Local Communities Consideration for NGO & NPO the environment Cooperative activities Contribution to society Employees Rewarding work Comfortable workplaces

7 Social & Environmental Report 2006 Corporate Governance

Mazda considers corporate governance one of the most important issues in the execution of its business and vigorously implements various measures in this area.

company and all Mazda directors. The committee meets four Ensuring Transparent and Efficient times a year. Mazda receives managerial opinions and Business Operations recommendations from these committee members, who offer their specialized knowledge and insight from a global In addition to statutory bodies such as the annual general perspective. Mazda reflects the committee’s input in its meeting of shareholders, the board of directors and the board management practices. of corporate auditors, Mazda has an executive committee. Executive committee meetings are held to formulate and discuss important company policies and measures, and receive Auditing System reports on the day-to-day running of the business. Other advisory bodies that assist the president with decision-making have also been established. The Board of Corporate Auditors is composed of five members, Mazda has introduced the executive officer system to including three outside auditors. Each corporate auditor is promote the separation of executive and management responsible for auditing business execution by the directors in functions. This has augmented the effectiveness of the board of accordance with the Board of corporate auditors’ annual audit directors as a supervisory body. These and other steps are plan. There are no business relationships or other conflicts of helping to improve management efficiency at Mazda, resulting interest between Mazda and its outside corporate auditors. in faster decision-making through enhanced discussion, The Internal Auditing Division contributes to sound and delegation of authority to executive officers and other initiatives. efficient management by checking the appropriateness of As of March 31, 2006, Mazda had a total of 36 executive operations at Mazda and its affiliates with regard to officers and nine directors, some of whom hold concurrent management’s targets, policies and plans and compliance with posts as executive officers. laws and regulations. Auditing of accounts is carried out by an auditing corporation under contract with Mazda, with continuous participation Management Advisory Committee restricted to less than seven years for all members. The corporate auditors, both independently and collectively as the board of corporate auditors, the Internal Auditing Division, and In addition, Mazda has established a Management Advisory the independent auditor cooperate through frequent meetings. Committee composed of leading figures from outside the

Business Execution and Supervisory Framework

General Meeting of Shareholders

Select Select Select

Accounting audit Corporate auditors Auditors on the Board of Audit Consultation Corporate Auditors Board of Directors Management Three of the five Directors Advisory auditors are Committee external.

Direction Executive Audit Consultation Representative Director Committee and President Meeting and other internal advisory bodies

Executive Officers

Division General Managers, etc.

Social & Environmental Report 2006 8 Corporate Ethics and Compliance

Mazda believes that adhering to legal and ethical standards in every facet of its operations is indispensable to gaining the trust of its stakeholders. We fully recognize the importance of compliance and continue to promote fair and honest business practices throughout the Mazda group.

Complete Compliance

Mazda believes that a company cannot achieve sustainable growth without the trust of all its stakeholders, whether they are customers, shareholders, investors, suppliers, employees or the local communities where we work, both in Japan and overseas. Business practices that adhere to legal requirements and ethics are prerequisites for us to fulfill our social responsibilities and to gain stakeholder confidence. All of Mazda’s personnel —directors and employees alike— recognize the importance of compliance, and are united in pursuing fair and honest operations throughout the group. Compliance cards are distributed to all employees.

Outline of “Mazda Corporate Ethics Code of Conduct”

Five key items defining corporate ethics as sincerity: Action Guidelines 1. Comply with laws and regulations, corporate rules, common 1. Comply with laws and regulations and the company’s rules. With sense and sound practice in the international society. respect to matters not clearly provided for, make a judgment considering their spirit. 2. Be fair and even-handed. 2. Treat employees, customers and clients fairly and justly. Not 3. Fulfill the company’s social responsibilities obtain from or give to anybody an unjust benefit and/or favor 4. Fulfill your own duties faithfully. taking advantage of the business position. 3. Make distinctions between public and private affairs, and should 5. Be honest. never pocket or abuse the company’s assets. 4. Keep confidential information never infringe on any intellectual property right, whether it belongs to Mazda or another party. Reports of violations of law or regulation: 5. Seek to develop, manufacture and sell products taking into consideration human safety and the environment. Report directly to the Ethics Consulting Office as soon as any violation is known. 6. Always act with a view to seeking sound profits. Any retaliatory action or inappropriate treatment with respect to 7. Respect civil rights and human dignity. any person reporting or cooperating with the investigation 8. Always state the truth honestly and timely in reporting internally of violations is forbidden. and /or to the public.

Mazda’s Compliance Structure

President

Cooperation Ethics Consulting Office (Internal Auditing Div.) Ethics Committee (Secretariat: Office of Legal Affairs, Corporate Affairs Div.)

Training / company-wide education Consultation and Training/ company-wide education Consultation and Advice / recommendation reports Advice / recommendation reports

Mazda Divisions and Departments ()Executive Directors / Head Office General Managers / Affiliated Companies Division General Managers = responsible for compliance

9 Social & Environmental Report 2006 Close-up Outline of the Ethics Committee’s Activities Compliance Training and Education for Employees

Based on Mazda’s Corporate Ethics Code of Conduct Mazda conducts regular training on corporate ethics and The Ethics Committee is engaged in various activities to ensure compliance targeting all new recruits and newly promoted compliance, such as the development of guidelines for the management and senior management. Corporate Ethics Code of Conduct and a range of employee During FY2005, 1,687 members of our company training and education programs. participated in such programs.

Outline of the Ethics Committee’s Activities

1997 Ethics Committee established under direct jurisdiction of President.

1998 Produced Mazda’s Corporate Ethics Code of Conduct, as well as the ‘Guideline on Reception and Gifts’, which acts as a specific index for behavior. Compliance training

2002 Personal Message Invited an external lecturer to address directors and senior management on compliance (implemented once per year since The Training Includes Examining then). Case Studies I am a corporate ethics and compliance 2004 trainer, mainly for new recruits. As far as Produced a Compliance Manual, containing specific examples, possible, I try to provide real life in order to promote awareness of compliance issues examples to ensure that the key points Kenji throughout the company, and distributed it to all employees. are understood by those who are new to Wakinaka the concepts of corporate ethics and Office of Legal Affairs, Corporate Affairs 2005 compliance. Division Distributed ‘carry cards’ to all employees, containing the Five In the future, we will endeavor to Principles of Honest Behavior and the Action Guidelines. further improve the training curriculum Began a Compliance Course via e-learning, which is based on the impressions and opinions compulsory for all indirectly related employees. of the trainees. Implemented an ‘Ethics Survey’ for all directors and employees, in order to understand how aware they are of compliance issues

2006 Compliance education programs implemented for domestic Requesting Compliance with Labor-related and overseas affiliated companies. Laws and Regulations among Discussions carried out on compliance in both production Business Partners and administrative departments with the aim of spreading and sharing compliance awareness. It is of the utmost importance to Mazda to carry out its business and fulfill its social responsibilities in conforming to the law in every country in which it operates. In addition to Mazda itself, the company also requests its Reporting System for Perceived Violations suppliers maintain strict adherence to labor-related laws. Mazda has established an Ethics Consulting Office to handle Mazda does not tolerate such practices as forced or child reports of legal violations, as well as a Human Rights labor, or abuse of authority or training. To this end, we Enlightening Promotion Office to handle reports of sexual distribute a document entitled ‘Request for Total Compliance harassment and human rights violations. Anonymity is assured with Labor Related Laws.’ to prevent retaliatory or malicious actions toward any person cooperating in reporting or investigating violations.

Social & Environmental Report 2006 10 Abolition of Human Rights Violations

Mazda aims to become a leading company in Japan, respecting the human rights and dignity of every person involved in all of our corporate activities. To this end, Mazda and the Mazda group have established a set of regulations and a scheme to spread awareness as well as a training program concerned with the protection of human rights.

Guidelines for Eliminating Sexual Harassment Human Rights Protection Activities Prior to the establishment of Mazda’s Human Rights Committee, the company issued its Guidelines for Eliminating Sexual Harassment on April 26, 1999. Since 2000, under the The Human Rights Committee and Eliminating auspices of the Human Rights Committee, various sexual Human Rights Violations Rules harassment prevention measures have been implemented. Mazda established its Human Rights Committee on October 25, 2000, to determine policies on the formulation and revision of rules to eliminate human rights violations, to supervise adherence to Outline of the Sexual Harassment Elimination Guidelines these rules and to promote respect for human rights. Also the Sexual harassment is never tolerated. Eliminating Human Rights Violations Rules were developed to Employees who breach the guidelines will be subject to deepen the respect for human rights throughout the company. disciplinary action in accordance with the company’s rules.

Structure of the Human Rights Committee Diverse Human Rights Enlightening Activities Human Rights Committee Chairperson: President and CEO We established the Human Rights Enlightening Promotion Office in the Human Resources Department of the Personnel & Human Office: Human Resources Deputy Chairperson: Executive Officer in Department charge of Personnel & Human Development Development Division to lead our in-house human rights education activities. This body is responsible for developing the Senior Managing company’s various education and training activities. Executive Officer As part of the drive to raise awareness among our staff, a Executive Officer in charge of Legal Affairs Observers Human Rights Card is issued to all employees to publicize the Executive Officer in Auditors consultation service provided by the Human Rights Enlightening charge of main areas Promotion Office. Other activities include exhibiting human rights General Manager of Personnel & Human panel displays, soliciting human rights slogans, displaying human Development Division rights posters and holding human rights meetings.

Outline of Eliminating Human Rights Violations Rules All employees are forbidden from all violations of human rights when conducting corporate activities, whether at the workplace or elsewhere, including rights related to race, nationality, creed, gender, social standing, origin, age, physical disability or sexual preference; from sexual harassment; and from other inappropriate actions. All violations of these regulations, violations of human rights, or retaliatory actions shall be reported to Mazda. All retaliatory action in response to reports of human rights violations or in regard to cooperation with investigations is forbidden.

Human Rights Training Basic Philosophy Our human rights training programs are geared to new In recognition of the importance of respect for everyone and employees on entering the company and to existing staff their individuality, Mazda will not tolerate any violation of human gaining promotions or new responsibilities. rights in any part of its operations. Mazda also holds performances, concerts and other events in On November 1, 2000, then President and CEO Mark Fields support of human rights studies and training. Japanese soprano issued a human rights proclamation to the company and the Chikako Watanabe was invited to perform at a concert to public that underpins this belief: “Mazda should strive to promote human rights during FY2005 in which approximately become the leading company in Japan for respecting human 230 employees participated. The finale was a chorus of Kyu rights and for the ethical treatment of its employees.” This Sakamoto’s “Ue o Muite Aruko” (released in the United States proclamation is a summary of Mazda’s basic philosophy. as “Sukiyaki”) complete with sign language accompaniment. Moreover, this basic philosophy is a statement of not just Mazda’s way of thinking, but also that of the entire group. Mazda aims to promote human rights in all its global operations by conducting high level human rights protection activities in Japan and overseas under the “One Mazda” slogan.

11 Social & Environmental Report 2006 Abolition of Human Rights Violations/Risk Management

Bus Displaying Human Rights Slogans Activities to Promote Human Rights All Over the Globe Since FY2005, as part of our drive to instill human rights We place great importance on human rights activities in our awareness in the day-to-day routine of employees, the buses operations throughout the world and are continually seeking running throughout the Mazda complex have sported improvements across the more than 140 regions and countries numerous human rights slogans and posters. in which the Mazda group operates. Accordingly, we have created an information network spanning group companies worldwide, with Mazda as the hub, to enable us to precisely monitor the status of these activities and handle any problems as group-wide issues. Mazda aims to become a global group that is a leader in respect for human rights, and will continue to guide and support all companies within the group to raise the global standard. Human Rights Counseling and Investigation Desk and Female Employee Counseling Desk To provide swift aid and response to victims of human rights abuse inside the company and beyond, we have established a Human Rights Counseling and Investigation Desk and a Female Employee Counseling Desk in the Human Rights Enlightening Promotion Office. Human rights training for Each of these facilities is staffed with dedicated counselors local staff in China who swiftly and appropriately respond to inquiries by any employee wanting to discuss human rights issues, via a hot line or e-mail. Additionally, the general manager of each department is appointed as a human rights protection officer who functions as an interdepartmental liaison to facilitate a swift resolution and arrange any necessary counseling. Global human rights Every case handled by the two counseling desks is reported teleconferences to the Human Rights Committee and used as feedback to create more effective company-wide policies and to improve educational programs.

Risk Management

At Mazda we are committed to promotion of risk management as part of our responsibilities in corporate management policy. Risk management not only strengthens our levels of compliance, it also enables us to respond effectively to a wide variety of internal and external risks.

In January 2003, we issued the Basic Mazda Risk Risk Management Activities Management Policy, and established our Risk Management Regulations in February 2004. Risk management activities began on a company-wide basis in FY2004. Each department Risk Identification and Measures conducted its own risk assessment in accordance with these Mazda established a Risk Management Office in January 2002 regulations and implemented the necessary preventions. in its company-wide Administrative Organization, and set the During FY2005, a total of 40 issues throughout the company target of “all directors and employees being actively involved in were deemed in need of risk management measures. Of these, risk management.” Based on this, we created the Risk 22 have been resolved, and the remaining 18 are currently Management Committee and began development of the being addressed. infrastructure for risk management regulations.

Social & Environmental Report 2006 12 Risk Management

Responding to Emergency Situations In February 2004, Mazda determined its regulations for crisis Mazda’s Basic Risk Management Policy (outline) control, which stipulate preparations that include action Risk management philosophy guidelines, initial response, communication and implementation The environment surrounding our corporate activities includes of emergency drills. These steps ensure our readiness for swift swiftly developing progress in IT, increasing globalization, worsening environmental problems and increasing levels of and appropriate action in the awareness of legal compliance issues. It is changing rapidly and is event of an emergency. expected to continue to change and diversify. In order to work towards achieving our corporate vision, we need to respond During FY2005, we deployed appropriately to these environmental changes, while at the same emergency equipment, including time ensuring the sustainability and soundness of all our corporate rescue apparatus and emergency activities so as to minimize latent risks. When irregularities and emergencies do occur, we need to have a system in place to supplies in the Hiroshima and ensure that recovery is as swift as possible, in order to maintain the Hofu districts in preparation for trust of our customers, shareholders and society in general. The Rescue equipment for use in entire Mazda group is involved in risk management, working to any disaster. the event of a disaster become and remain a truly trusted corporation. Risk management objectives Provisions for e-Risk In the following ways, Mazda shall strive for the ‘Enhancement of Mazda defines ‘e-Risk’ as any risk arising from or related to the Corporate Value and Harmony with the Community,’ thereby realizing the company's corporate vision: use of IT tools that may directly damage or indirectly impede 1. Ensure the health and safety of all those who make up the business. The company is working on the minimization of such Mazda group as well as local citizens 2. Maintain and increase trust from community risks and damage limitation in the event of such risks occurring. 3. Make appropriate use of the tangible and intangible corporate We have identified 11 areas susceptible to potential e-Risk: assets of the Mazda group 4. Secure interests of the stakeholders, earn their trust and meet damage to corporate image, damage to brand image, breach their expectations of confidentiality, data corruption/destruction, reduced data 5. Support the functions of the organization and seek a rapid visibility, prevention of data use, human rights violations, restoration of business activities in the event of abnormal circumstances or emergencies intellectual property rights violations, protection/utilization of Action guidelines intellectual assets, noncompliance with laws or regulations, All officers and employees shall be aware of potential risk in every reduced business efficiency and damaged morale. These are phase of corporate activity, and shall implement appropriate risk management in every phase of implementation. the subject areas of the IT Tool Utilization Guide, which defines basic policy for use of IT tools and stipulates rules and Methods of implementing risk management 1. Employees should be engaged in constant prevention and etiquette. To raise the awareness among all employees, this reduction of risk in their day-to-day work, and in promotion of guide is posted on the company intranet and included in a risk prevention measures (risk management). In addition, 2. They should also be engaged in minimizing damage and periodic e-newsletter, “e-kawaraban.” speeding recovery if any crisis should occur (crisis control). During FY2005, we set up a specialized site on the Intranet The necessary structures and rules must be in place to implement the two activities mentioned above. to spread awareness and knowledge of rules relating to the Protection of Personal Information Act (enacted in April 2005) Scope of application 1. Shall apply to all business risks and of data management in general. 2. Shall apply to the entire Mazda group, including subsidiaries and affiliates

Risk Management (RM) Structure

Standard procedure President Emergency Procedures

President Directors responsible for RM Existing committees Ethics Committee RM Committee Human Rights Committee Directors responsible for RM Secretariat: Risk General Health and Safety Management Office Committee Security-related Export Control Committee e-Risk Management Company-wide Quality Committee Emergency Response Office Promotion Council Fire Prevention Control Committee Others

Divisions Division managers Subsidiaries and affiliates In cases where an inter-departmental response is required and the existing Divisional RM crisis control organization cannot deal with the level of risk, the directors Promotion Manager responsible for RM will work in cooperation with the president to establish an All employees emergency response office, and appoint a general manager to such an office.

13 Social & Environmental Report 2006 Mazda and the Global Society

Conducting Procurement with Regard to Human Rights and Environmental Concerns 15

Reducing Accidents with Cutting-edge Technologies 17

Local Cars Built by Local People— Mazda’s Efforts in the Swelling 19 Chinese Market

The Quality Control Group That’s Making the Assembly Lines More User-friendly 21 for Women

Social & Environmental Report 2006 14 Mazda and the Global Society

Conducting Procurement with Regard to Human Rights and Environmental Concerns

oving towards Optimal Global Mazda is progressing toward optimal competitiveness and other factors. M Procurement global procurement through its joint While optimizing the quality and cost of Each finished car requires tens of programs with the Ford Group. The Ford parts and materials purchased in this way, thousands of parts of several thousand Group’s next-generation B-car program is we also stipulate that suppliers must meet types. Mazda currently produces its one example this. their social responsibilities. At the automobiles in 16 countries and regions, tendering stage, we require compliance which necessitates procuring various ulfilling Responsibilities to Suppliers with our social responsibility guidelines. parts and materials from 22 different F and Encouraging Suppliers to This set of guidelines particularly countries worldwide. Fulfill Their Responsibilities emphasizes treatment of employees by Currently, our diverse procurement web When selecting procurement sources, the manufacturer, including the exclusion spans North America, Europe, Asia, Africa Mazda adamantly maintains a fair and of employment of workers under the age and Oceania, comprising approximately impartial tendering system and a of sixteen, maintenance of a reasonable 120 suppliers—for example, speakers transparent selection process, ensuring working environment and respect for and oil coolers come from the United equal opportunities for any supplier human rights. This adds up to a pledge States, bearings from South Korea and regardless of country and scale of from the company’s senior management clutch covers from the Czech Republic. enterprise. This enables us to fulfill our to treat its employees with respect. As procurement sources globalize and responsibilities to suppliers. We carry out Similarly, Green Procurement diversify, it becomes increasingly open and fair procurement on the basis of Guidelines are presented to important to select the best value and objective comparison of companies after manufacturers, requiring ISO 14001, highest quality products from the world’s quantifying numerical values for each international certification for environmental parts and materials manufacturers. This is manufacturer’s technological prowess, management systems, and compliance the essence of global optimal sourcing. quality assurance capacity, cost with environmental laws.

15 Social & Environmental Report 2006 Mazda can therefore work with too. We found that the culture gap could decision-making. suppliers selected in this way to fulfill its be extremely wide. While respecting individuals’ opinions social responsibilities, in terms of respect To bridge this gap and acquaint and ways of thinking that may differ from for human rights and environmental members with each others’ background, our own, we work towards the optimum protection, in every step of the supply we conducted team-building training solutions. Through Mazda’s Global chain right through to the delivery of events. More extensive measures, such Optimal Sourcing we foster mutual automobiles to customers. as daily meetings, clarified the understanding with people and Through the joint programs, Mazda has decision-making rules and processes and businesses worldwide and thus create broadened its procurement base and helped the team to become capable of sustainable societies together. expanded business opportunities for its fruitful discussions and swift existing suppliers. That is to say, while Mazda started sourcing from new suppliers in Europe and China, its existing suppliers in Japan were able to strike up procurement arrangements with Ford. Nils Goellner The key to this arrangement is that Kojun Tanaka B2e Program Mazda fulfills its responsibilities to Deputy Program Manager Purchasing Program Manager Cross Carline Strategy Gr. Ford Motor Corporation suppliers, while encouraging its suppliers to fulfill their responsibilities to society. Preserving fairness and Mazda is a benchmark company This goes far beyond issues of cost. It impartiality—a starting point for in terms of relationships between involves investment to build mutually global business company and community beneficial relationships to grow together. Increasing the numbers of European and I have been working for six years at the Mazda Chinese suppliers has been one major headquarters, dispatched from Ford Europe. mphasizing Diversity is Connected outcome of the joint programs. Another has What has impressed me on viewing Mazda as E to Creating Sustainable Societies been that through joint programs, Mazda has an insider is the intimacy and trust that it Participants in the joint programs span been able to provide our suppliers in Japan maintains with regional suppliers, with with the chance to start business relationships dating back to its founding. many nationalities, including Japanese, opportunities with Ford, with a view to However, for Mazda to increase its German and Chinese nationals. Currently, expanding their business globally. competitive power globally, I believe that it will communication between representatives The most important thing that I learned from have to use the data compiled through its joint is conducted with English as the common working with Nils and other staff at Ford is the programs to further develop its procurement language. However, at the outset of the attitude to pursue complete fairness and activities and raise its regional suppliers’ impartiality. Another is that objective competitiveness. programs, meetings did not always presentation of facts and figures is necessary The strong bonds with local community can progress smoothly. This was attributable for everyone to understand clearly. also be seen in social contributions to the to differences that are not merely linguistic. Furthermore, establishing rules and processes communities where we work. Ford also carries Apart from language, peoples’ approaches is paramount to achieving swift out an array of such social contributions, but decision-making in a mixed nationality team. in terms of being rooted in the local towards brands and strategies are also Through this joint program, I have been able community, I think that Mazda serves as the very different. The cultures that are behind to acquire the perspective necessary to benchmark company for Ford. these various approaches are different, compete in global business.

Major parts procured from overseas

Germany United Kingdom Dampers, etc Oil filters France Czech Republic High-tension Clutch covers cables, etc United States South Korea Taiwan Speakers, oil coolers, etc Bearings, etc Wheels China Thailand Speakers, etc Piston rings, etc

Australia Coil springs, etc

Social & Environmental Report 2006 16 Mazda and the Global Society Reducing Accidents with Cutting-edge Technologies

System Diagram Pre-crash and radar cruise control unit The System in Operation

STEP 1 Pre-crash seatbelt control unit

Milliwave radar

Proximity to moving vehicle Warning alarm Warning light

STEP 2

Brake actuator Motor Pretensioner

azda’s Pre-crash Safety System minimizing injuries to occupants in the M Helps Prevent Crashes and Protect event of a crash. We have developed Occupants in the Event of Collisions the Mazda Pre-crash Safety System, a Vehicle moving closer light braking rear collision becoming difficult to avoid Advances in auto-safety technologies, technology that is unique to Mazda. stronger braking such as Antilock Braking Systems * 2005 National Police Agency survey data (ABS) and airbags, have led to a STEP 3 downtrend in fatalities from traffic accidents over the past few years. A ctivation Only in Emergencies However, the number of accidents The Mazda Pre-crash Safety System remains high, at more than 900,000* uses a radar sensor mounted toward per year. Of this figure, approximately the front of the car to monitor the one-third are rear-end and head-on vehicle ahead, oncoming vehicles and collisions. During the past 10 years, other obstacles. If a potential collision Minimize the slack in the seatbelt rear-end collisions have increased by is detected, a warning is given via a 50 percent, and developing buzzer and a light. If the driver fails to countermeasures is an issue facing all take an appropriate evasive action, just car manufacturers. These before collision the brakes are applied countermeasures are broadly classified automatically to reduce speed. In into “Active Safety Technologies” which addition, the seatbelts are help prevent accidents from occurring, pre-tensioned to minimize the slack in and “Passive Safety Technologies” the seatbelt webbing and restrain the which minimize post-crash damage. occupants even more effectively. ABS, which helps prevent tires from The difficulty is in assessing when a locking and skidding during braking, is situation is dangerous and necessitates an example of the former; airbags, a warning. Road conditions are seatbelts and crumple zones are diverse, as are driving styles. On the examples of the latter. While active open road, brakes are rarely used, but safety technologies have progressed in busy streets, drivers have to during recent years, “pre-crash safety continually apply them. Drivers also technologies,” which combine active have different concepts of a safe and passive technologies, have gained distance from the car in front. attention. Pre-crash safety Consequently, conditions that appear technologies fuse these two safety safe on one road may be dangerous on technologies by assessing the another, similarly for different drivers. If possibility of accident in advance and a warning consistently goes on when

17 Social & Environmental Report 2006 conditions are safe, the credibility of crash simulation tests to fine tune the Pre-crash Safety System. The trials, the system will be undermined, which system operation. Two timing levels which highlighted features such as may ultimately lead drivers to ignore were established for warnings which detection of approaching obstacles valid danger warnings. can be selected to suit the driver and and crash simulations, gained acclaim Mazda simulated conditions in road conditions. Through these for the system: “The timing of the various markets and established more processes, Mazda has created a highly warnings is truly useful” and “The than 200 verification parameters to reliable system, which generates warnings give enough time to steer to help the system operate appropriately. alarms only when necessary, thus avoid collisions.” We selected situations where reducing the likelihood of accidents accidents were likely to occur under and injuries, and reduces injuries when diverse driving conditions, spanning an impact is unavoidable. urban and suburban roads, national No matter how many resources we highways, mountainous routes, pour into Mazda’s Pre-crash Safety extremely cold areas such as System, it is of no use unless it is used. Hokkaido, and in the heavy snowfalls To this end, Mazda hosted a test drive of Hokuriku. We repeated the event for journalists, showcasing a car verification on-site under these local fitted with various cutting-edge conditions. After this, we conducted equipment, including the Mazda

Test drive event for journalists

Social & Environmental Report 2006 18 Mazda and the Global Society

stablishment of a General a result of this initiative, annual sales in E Management Company to China leapt 51.2% to 133,778 vehicles Consolidate Operations in China during 2005, despite intensified market During 2005, China’s domestic automobile competition. We are progressing steadily sales grew 13.4% to 5,920,000 vehicles, toward our mid-term business target for surpassing Japanese market sales of China; to construct a production and sales 5,850,000 for the year. This makes China system for 300,000 vehicles by 2010. the world’s second largest automobile Mazda Motor (Shanghai) Business market, after the United States. Household Management & Consulting Co., Ltd. vehicle ownership has also rapidly increased, (MCO) was established in June 2005 to accounting for 3,970,000 of this figure. take over general business management Mazda has been a serious contender in for production and sales throughout China. the Chinese market since 2001, during In August that year, MCO was expanded which time it has vastly increased both with the China Engineering Support production and sales. In January 2005, Center, also in Shanghai. MCO head office Mazda announced it was joining a venture is responsible for planning, finance, labor with Changan Ford to establish a vehicle and personnel, public relations, information plant in Nanjing. Later that May, Mazda, Mazda Motor (Shanghai) Business Management technology and distribution; the China Ford and Changan Automotive then & Consulting Co., Ltd. Engineering Support Center oversees announced they had gained government research and development, purchasing, Numbers of Local Employees authorization for an amalgamated engine quality assurance, and customer service. China production company. Construction of both MCO Engineering Together they control all the facilities in total facilities has since progressed steadily, and Support Center China and function as the headquarters. Japanese 47 27 currently startup is scheduled for 2007. In employees March 2005, we established FAW Mazda Chinese 53 32 roviding Employment and Human employees Motor Sales Co., Ltd. in a with P Resources Training for Chinese Employees 100 59 China FAW Group Corporation as a Total Mazda has fully committed to business in measure to reinforce our sales network. As (As of June 30, 2006) China, and localizing operations has

Local Cars Built by Local People— Mazda’s Efforts in the Swelling Chinese Market

19 Social & Environmental Report 2006 become a priority issue in order to on the “One MCO” concept that Chinese for vacant in-house positions, and a continue spreading its roots there. Any and Japanese employees are promoting provisionally named Welfare Committee enterprise is responsible for the bilaterally. To foster solidarity between through which employees can participate development of its employees and MCO employees, we are boosting opportunities in planning and running functions and considers this its most important task. The for Chinese employees to express their other welfare-related events. Mazda will China Engineering Support Center, for opinions to Japanese management, such continue to listen to the opinions of its instance, has introduced programs that as at the daily morning meeting. Chinese employees, to promote systematically train local employees. It is important for management to localization, to tailor and optimize local Within the program, personal targets are monitor employee satisfaction (ES) levels operations, and to contribute to the set each year and the curriculum is in China, since the Chinese workforce Chinese economy. tailored to best suit the individual’s level. tends to be volatile. In discussions with *1 MPI: Management Process Innovation Moreover, instruction in all areas features Chinese employees, requests were made *2 EPI: Engineering Process Innovation one-on-one training with Japanese staff. for a means to express employee *3 BPI: Backyard Process Innovation There are also opportunities for selected opinions. Personnel management Chinese staff to visit Japan for training at the responded swiftly by establishing an Mazda Head Office. So far seven members informal meeting room. of the purchasing and public relations They are also departments have been invited for training investigating the periods ranging from one to six weeks. establishment of a Job Since August 2006, we have also carried Posting System, that out research seminars for employees to considers staff applications acquire knowledge on automobile component parts and their functions, test methods and other specialist areas. It is also our responsibility as an enterprise to assign personnel who have undergone personal development training to posts that match their capabilities. Currently, the China Engineering Support Center employs two Chinese assistant managers, and we plan to boost this figure to five by the end of 2007 as part of our policy of active deployment of personnel with management ambitions. MCO carries out product development unique to the Chinese market, and through support activities for affiliates and suppliers it aims to contribute to the growth of the Chinese automobile industry. Akira Tanioka Zhang Haiguang Director and Vice president Assistant Manager reating Systems and Working China Engineering Support Customer Service Department C Center Mazda Motor (Shanghai) Environments That Reflect Mazda Motor (Shanghai) Business Management & Employee Opinions Business Management Co., Ltd. Consulting Co., Ltd. As a company making inroads in the Chinese Employees Building Chinese market, it is our duty to create a Boosting Training Opportunities and the Mazda Brand Promoting Knowledge Management corporate climate and working environment attuned to the different I am responsible for the MCO China Engineering I work in the Customer Service Department, culture and customs of local staff. At the Support Center, where we are faced with the involved in business support for sales challenge of training our Chinese employees. Mazda Head Office in Japan, we are management companies and service training During 2007, we will double the center’s 30 or support. It is a relaxed workplace where I am 1 promoting MPI* Activities, which aim to so Chinese employees to bolster our treated very well, and I work as hard as I can in create a solid business base for the organizational strength and improve and expand the belief that this will lead to greater medium and long-term future. Using this training programs, which we think will lead to responsibilities and authority in the future. program as a basis, MCO is building a product development that reflects Chinese I think that business efficiency could be needs. We are in an era of intense competition raised and the contribution by Chinese staff strong foundation for its ongoing between automobile manufacturers. Mazda increased by cultivating greater trust between operations through its own EPI*2 Program needs to thoroughly build up its brand image to the Chinese and Japanese employees. As the for the purchasing and technical stand apart from its competitors. Chinese staff are highly familiar with local departments, and BPI*3 Program for The majority of Chinese employees at the conditions, they are best equipped to carry out China Engineering Support Center are young— management departments. One negotiations and discussions with business the same generation as my children. Although I partners. I think we need to work together to component of these programs is can’t help but feel affection toward them, I sense create a working environment that stimulates “improving corporate climate.” This is an the vast amount of training necessary for them the will to study and promotes Knowledge effort to further operations in China based to bear the responsibility for the future of MCO. Management.

Social & Environmental Report 2006 20 Mazda and the Global Society The Quality Control Group That’s Making the Assembly Lines More User-friendly for Women

markedly improved productivity and they implifying the Brake Hose Diagrams Showing the Four Benefits S Attachment Process of Rubber Jig named it “Fit-kun.” This specialized brake In the fall of 2003, there were hold ups hose attachment tool simplified the with partially completed assemblies on the process and made it 1.9 times faster. In Demio line at the Powertrain Production addition to the main Mazda plant, Fit-Kun Dept. No. 1 Axle Assembly Plant. This led will be distributed to enhance production to many incidences of delayed shipments. Easy to fit due to throughout all domestic and overseas We carried out a survey to establish the elasticity of rubber facilities. average time required for each process on The achievement of the Min-Min Circle different assembly lines, and discovered was recognized through an award at the that while production of the MPV and national QC circle competition. The group Roadster required 22 to 23 seconds per also received the Quality Control Circle process, the Demio needed 31 seconds. Kaoru Ishikawa Prize. The young The brake hose assembly process was The rubber grips the parts as one while members of the team who presented their the hose is inserted, found to be the greatest contributor to this removing the need for a ball plunger work in front of the many participants at figure. A group of young female the meeting are still receiving a stream of employees established the “Min-Min invitations and requests for presentations Circle” quality control group with the aim from other companies, industry groups of cutting down this time. and organizations all over Japan. The problem turned out to be that the The rubber slips off easily In the creation of Fit-Kun, the team and can be removed in threaded screw on the end of the brake any direction. members cultivated their ideas with the hose was not fixed, so when attaching it support of other departments such as the to the brake unit, it was difficult to locate Production Engineering Div. and the and do up whether by holding the hose or Maintenance Dept. Mazda is committed the screw itself. When holding the hose, to continue acting on employees’ opinions the other hand had to be employed to and ideas, and to continue building keep the screw from spinning freely, while The hose is then ready assembly lines that are friendly to women to be tightened handling the screw itself placed too much and a workplace that is amenable to all. strain on the fingertips. As a solution, they decided to manufacture a special metal tool for holding the screw. However, they found it difficult to use as the metal would not grip Mayumi properly. Consequently, they Sakashita Yumiko Rokuta manufactured a rubber tool that was easy Powertrain Production Powertrain Production Department No. 1 Department No. 1 for the operator to fit and successfully Axle Gr. Axle Gr. united the hose and screw. With the tool, both hands could be used to guide the Still Striving for Further The Importance of Pursuing hose into the brake unit. The rubber tool Improvements Quality without Compromise We handle the brakes, which are one of the Ms. Sakashita and I named the Min-Min circle Until Now Brake and Screw Configuration parts that influence the safety of the car, so after a character that appears in both our Brake hose maintaining quality is vital. Through successive names. We have traveled all over Japan, from improvements, I am always striving to create a Tokyo to Okinawa, giving presentations about line that produces highly reliable parts. this project. I’m not very good at answering Cross-sectional view Our target is to implement improvements that questions, so I leave them to Ms. Sakashita as make every process in the plant doable by the leader, but I do feel that I have grown used Screw Unwanted rotation female employees. I hope that the company will to standing up there on the big stage. continue to develop jig and tools that enable I believe that quality is not something that load reduction in its operations, and thereby should involve compromise. It is something that remove problems that arise from reliance on has to come from the desire of the individual. Screw is not physical strength. We will step up the activities Even though the human attention span is fixed to Hose the hose of the Min-Min Circle to reduce the number of limited, I set my heart on building each car operations with high physical demands. perfectly, without any lapses in concentration.

21 Social & Environmental Report 2006 Mazda and the Global Environment

Flying Higher than Ever— with Hydrogen Providing Clean Energy, 23 the Rotary Engine Has Evolved Roundtable Discussion The Rotary Engine is Pivotal to Advancing the Advent of a Hydrogen Energy Society

Offering Higher Fuel Efficiency, Cleaner Exhaust Emissions and 27 Mazda’s “Fun-to-Drive” Personality

The First Coating Technology in the World that Simultaneously Reduces VOC and 29 CO2 Emissions

Mazda Develops High-Strength Heat-Resistant Bioplastic for Use in Vehicle Interior Parts in Collaboration 31 with Industry-academia-government

Social & Environmental Report 2006 22 Mazda and the Global Environment

Flying Higher than Ever—with Hydrogen Providing Clean Energy, the Rotary Engine Has Evolved

he World’s First Hydrogen-Fueled commercial leasing the RX-8 Hydrogen T Rotary Engine Vehicle RE in February 2006. While fuel cell Electrolysis of water produces hydrogen electric generate electricity to power the and oxygen. The reverse reaction, vehicle’s motor, the rotary engine combining hydrogen with the oxygen in mounted in the RX-8 Hydrogen RE uses the air generates electricity. This hydrogen as a fuel for combustion. This is phenomenon can be used to drive the the company’s “Ultimate Eco-Car,” electric motor of a fuel cell vehicle. These developed faithfully in accordance with vehicles do not use fossil fuels and emit Mazda Cosmo Sports Mazda’s mission to build fun-to-drive only water as exhaust, with no generation Zoom-Zoom cars. We have achieved a of greenhouse gases such as CO2, or high-environmental-performance vehicle other noxious substances. The world’s with reduced oil resource consumption, automobile manufacturers are currently zero CO2 emissions and virtually no NOx competing to develop the next-generation generation, without sacrifices in torque, low-emission vehicles. acceleration and exhaust tail note Japan’s Ministry of Economy, Trade and experience compared with an internal Industry, Ministry of Land, Infrastructure combustion engine. and Transport, and Ministry of the Environment jointly formulated the Action Mazda Luce AP uring the 1970s, Our Rotary Plan for the Development and Promotion D Engines Met Exhaust Gas of Low-Emission Vehicles in 2001. This Regulations Ahead of Other Companies includes targets for the introduction of In 1967, Mazda developed an innovative 50,000 fuel cell electric vehicles by 2010. rotary engine—compact, lightweight and As of March 2006, approximately 50 smooth—and mounted it in the Mazda vehicles have been brought to Japan’s Cosmo Sport. roads, driven by public agencies and During the 1970s, the Muskie Act was energy-related organizations. introduced in the United States. At that Against this background, Mazda has time, it contained the world’s most realized the world’s first hydrogen-fueled stringent emissions regulations, forcing rotary engine vehicle and began Mazda Savanna AP automobile manufacturers everywhere to

23 Social & Environmental Report 2006 rush to develop exhaust gas purification Difference between RE and Reciprocal technologies. Although the enforcement Engine Structures of the act was later delayed, rotary hydrogen injection equipment Akihiro engines, when fitted with antipollution air exhaust high fluidity of intake Kashiwagi systems, were able to successfully meet air-fuel mixture air-intake chamber exhaust Program Management Office the levels described. As a result, Mazda combustion bubble No.4 air chamber managed to jump ahead of the intake Passing on Resources and competition with the domestic launch of a Sustainable Environment the Luce AP (Anti-Pollution) in November exhaust to Our Children 1972. As well as meeting the world’s strictest emission standards before the In the future, oil resources will be best Muskie Act was officially enforced, in 1973 Rotary engine Reciprocal engine employed not as fuel, but as raw materials for chemical products that can be made only from it became the first car in Japan to be petroleum. If fuels other than oil are used to eligible for preferential tax treatment for Hydrogen rotary engine EGR power automobiles, we can save this portion of low-pollution vehicles. Along with the our valuable oil reserves and pass it down to Savanna AP, which was the second our children for use in the future. gasoline In the past, I have been engaged in the vehicle to attain this status, it was the injection equipment development of mass-production rotary-engine cleanest vehicle in the world at that time in vehicles and alternative-fuel vehicles, including terms of emissions. electric cars. When I reflect on the development hydrogen of the RX-8 Hydrogen RE, I feel deeply grateful Subsequently, Mazda’s antipollution injection technologies quickly spread to its equipment to my predecessors who persevered in building rotary engines. reciprocal engines. The Grand Familia and It is our mission to evolve Mazda’s unique Luce were both certified as low-pollution technologies. I shall endeavor to continue doing reciprocal engine vehicles in the same year. so in order to pass down valuable resources and a sustainable environment to the next generation. eaping the Cost Benefits from R the Dual Fuel System The first oil shock hit automobile manufacturers at the start of the 1970s. Mazda’s competitors aborted development and production of rotary Akira Tatemoto engines on account of poor fuel and the combustion chamber are Manager of the Hydrogen Energy Division efficiencies. Mazda alone persevered, separate structures so backfiring is Iwatani International Corporation eventually solving the fuel efficiency unlikely to occur and stable combustion is issues. By constantly building on the ensured. Mazda is the only company in Mazda’s Products Play an Important various merits of the engine, Mazda finally the world that is successfully Role in Propelling us Toward reached the mass production stage. mass-producing the rotary engine. As this a Hydrogen Powered Society Years later, we discovered that the rotary mass-production engine was used as a Our company has been at the forefront of the engine is actually well suited to hydrogen basis for the RX-8 Hydrogen RE, hydrogen industry, involved in producing and fuel applications. development and manufacturing costs supplying hydrogen for approximately 50 years. Hydrogen, which ignites moreeasily were vastly curtailed, allowing the vehicle We welcome the application of hydrogen energies across society and are conducting than gasoline exacerbates the reciprocal to be competitively priced. The standard various promotional and publicity activities to engine’s susceptibility to backfiring monthly lease price of about ¥420,000 is that end. In these campaigns, we believe that (abnormal combustion in the superheated more economic than fuel cell electric hands-on experience enhances understanding combustion chamber intake). However, in vehicles. It makes it is easier for better than words, so we have leased a Mazda hydrogen rotary-engine car to supplement our the rotary engine, the air-intake chamber customers to adopt clean energy vehicles. two fuel cell electric vehicles. The stylish RX-8 Hydrogen RE is a hit with our clients, and many people ask to have their photographs taken posing in the driving seat. This makes it a highly useful tool in publicity events that promote a hydrogen powered society. By increasing the number of hydrogen filling stations, our company will strive to bolster the spread of clean energy.

Mazda’s hydrogen filling station

Social & Environmental Report 2006 24 Mazda and the Global Environment

The Mazda RX-8 Hydrogen RE escorted the runners in the 11th Inter-Prefectural Men’s Ekiden held in Hiroshima on January 22, 2006.

The Mazda RX-8 Hydrogen RE has a of the dual-fuel RX-8 Hydrogen RE, a The History of Developing Mazda’s dual-fuel system that allows the vehicle to Hydrogen-powered Vehicles hydrogen rotary engine vehicle designed run on either hydrogen or gasoline, for this transition period. For the next step, making it extremely accessible for 1991 we are planning to develop a dual-fuel Hydrogen rotary customers. At present there are only engine vehicle hydrogen rotary engine vehicle with about 15 hydrogen stations in Japan, so HR-X broader applications, more like the until the hydrogen supply infrastructure is Premacy than a sports car. expanded throughout every region, the 1993 However, the hydrogen rotary engine Hydrogen rotary gasoline option will provide customers engine vehicle vehicle is by no means just a temporary with peace of mind during long journeys. HR-X2 solution for this transition period or a 1993 stopgap until fuel cell electric vehicles oving towards Practical take off. Even after the advent of the M Roadster featuring Zoom-Zoom Eco-cars for hydrogen rotary engine full-blown hydrogen society, practical yet a Fully Fledged Hydrogen Society Zoom-Zoom eco-friendly hydrogen Consideration of the present state of the 1995 rotary engine vehicles will continue to global environment highlights the need to Capella Cargo featuring split the market with fuel cell electric develop cars that can run without oil by hydrogen rotary engine vehicles. Mazda has long been the time today’s children reach adulthood. committed to rotary engine cars, and will However, in order to achieve the spread 1997 continue to evolve hydrogen cars for the of fuel cell electric vehicles we need to Demio FC-EV new clean energy era. bring down production costs, which are said to be in the hundreds of millions of yen. Cost reductions are also necessary 2001 for hydrogen rotary engine vehicles. In Premacy FC-EV addition, a nationwide network of regional hydrogen stations is vital, so for the time 2003 being the transition toward widespread RX-8 Hydrogen RE use is likely to continue. Mazda has started commercial leasing

A liquid hydrogen plant in Sakai City, Osaka, operated by HydroEdge Co., Ltd., of the Iwatani Group

25 Social & Environmental Report 2006 Roundtable The Rotary Engine is Pivotal to Advancing Discussion the Advent of a Hydrogen Energy Society Iwatani International Corporation leased the first Mazda RX-8 Hydrogen RE hydrogen rotary engine car. Iwatani, as a leading manufacturer of industrial hydrogen gas, is active in promoting a hydrogen energy society. The head of Iwatani’s hydrogen energy department and the man in charge of Mazda’s business in Hiroshima talk with the program manager of Mazda’s hydrogen rotary engine vehicle.

Kashiwagi: You have been using the concentrated in the Tokyo area. In April have to be active in communication on RX-8 Hydrogen RE for a few months now. 2006, we started a large-scale liquid hydrogen safety to society, so that Please give us your impressions. hydrogen production plant in Sakai City, customers become aware of the Kobayashi: The design is really stylish, Osaka, and signed on to a project to importance of hydrogen and the safety and it attracts attention when I drive around construct a hydrogen station in Kansai measures that are employed. town, which is an effective PR tool. It International Airport. In the future, we plan Tatemoto: There are still many hurdles to handles the same as the gasoline version. to accelerate our activities towards building clear before the fuel cell electric vehicles Switching from gasoline to hydrogen is very a hydrogen infrastructure. are properly established. I think there are smooth and I enjoy the comfortable ride. Kashiwagi: We are hoping that Iwatani also some hurdles for Mazda’s hydrogen Tatemoto: The dual fuel system is quite will encourage the use of hydrogen among rotary engine cars, but the barriers are practical. Fuel cell electric vehicles can only customers in the future by making it an lower. Our company is dedicated to be driven in areas with hydrogen stations, easy fuel to use. Quite a number of building the infrastructure that will allow whereas the Mazda hydrogen rotary engine consumers are concerned that hydrogen is hydrogen rotary engine cars to permeate car can also run on gasoline, so it can be unsafe because it explodes. We would ask the market. used without geographic restrictions. This you to take every opportunity to Kashiwagi: Hydrogen will be the key is particularly important when driving long communicate that sensors and when we look for the best application of distances to participate in environment- mechanisms are installed to detect and the rotary engine in the future. We first related events. prevent any leakage, so hydrogen can be need to have people actually drive the RX-8 Kashiwagi: All our customers agree with stored and used with the utmost safety. Hydrogen RE. By listening to their honest this. Using a system that enables journeys Kobayashi: Pure hydrogen does not exist opinions, we will be able to evolve the to areas without hydrogen stations greatly in nature, but it is generated as a hydrogen rotary engine car. Hydrogen increases the scope for everyday use. by-product in the manufacture of iron and supply and hydrogen vehicles are Tatemoto: Our company, Iwatani steel and caustic soda, to name a few. It is prerequisite to improving the future outlook International, established the first hydrogen very important to collect this valuable of the energy situation. We need to station in Japan. From here on, we need to resource and to make the best use of it. In continue working together hand-in-hand. continue building stations one after addition, if safety measures are properly another. At present, there are roughly 14 taken, there is nothing to fear. We supply stations in the whole country, and these are hydrogen to Mazda’s filling station. We

Yutaka Kobayashi Akira Tatemoto Department of Industrial Manager of Hydrogen Gas and Machines Akihiro Energy Division Hiroshima Branch Kashiwagi Iwatani International Iwatani International Corporation Corporation Program Manager Program Management Office No. 4

Social & Environmental Report 2006 26 Mazda and the Global Environment

ffering Higher Fuel Efficiency, he MZR 2.3L DISI TURBO Engine emissions. In short, this epoch-making O Cleaner Exhaust Emissions T Delivers High Output on a Par with a reciprocating engine fully satisfies all the and Mazda’s “Fun-to-Drive” Personality 3–3.5L V6 Engine but with Fuel Efficiency prerequisites and surpasses the criteria Automobiles consume petroleum and 5% Better Than 2010 Requirements for a vehicle that people want to drive. other natural resources, and emit How can outstanding environmental Our first DISI TURBO engine, the greenhouse and hazardous gases. As a efficiency and fun-to-drive performance inline-four MZR 2.3L DISI TURBO engine company involved in manufacture and be achieved at the same time? One of is mounted in the Mazdaspeed6 sale of automobiles, global Mazda’s approaches to this dilemma ( Atenza), which went on environmental protection is an extremely was development of the Direct Injection sale in the spring of 2005. This achieved important issue for Mazda. Our goals are Spark Ignition (DISI) TURBO engine in high output and torque levels (max. to provide vehicles with the best possible 2005. With usual injection systems, air output of 200kW) on a par with a 3-liter fuel efficiency and lowest exhaust and gasoline are mixed prior to injection. V6 engine. At the same time, this car emissions, and to this end we are However, the DISI system injects only became the first turbocharged vehicle in developing improved combustion and gasoline directly into the combustion Japan to be certified as an SU-LEV with exhaust treatment technologies for all chamber. The DISI TURBO takes the fuel efficiency +5% on fuel efficiency types of engines; reciprocating, diesel direct injection system one step further standards for 2010. Recipient of the U.S. and rotary. In FY2005, 75.1% of the by adding a turbocharger to compress Word’s 10 Best Engines 2006 in January passenger cars Mazda manufactured for the air that is fed into the combustion 2006, this engine also won high marks the domestic market were SU-LEVs*, chamber prior to ignition. This results in and awards from automotive magazines meeting the country’s most stringent sharp acceleration, high torque at low and drivers in Japan and around the emissions levels. and medium revs, superb response, low world. However, environmental performance fuel consumption and clean exhaust is merely one of the requirements for Mazda’s products. People want convenient cars that make their life comfortable, yet they also demand cars that can provide them with a sense of excitement. Mazda’s “Zoom-Zoom” brand message describes its dedication to meeting these needs and its commitment to making cars that outperform people’s expectations. Mazda’s creed is that cars worthy of the Mazda name must offer good fuel efficiency and clean exhaust emissions as well as being fun-to-drive. Super Ultra Low Emission Vehicle: 75% lower than * 2005 exhaust emissions standards.

Main Specifications of the MZR 2.3L DISI TURBO Engine Mounted in the MPV

Engine Inline four-cylinder 2.3L DISI TURBO Maximum output (NET) 180kW (245PS) /5000rpm Maximum torque (NET) 350N·m (37.5kg-m) /2500rpm 10-15 mode 2WD: 10.2 km/L fuel efficiency 4WD: 9.4 km/L Exhaust SU-LEV (75% lower than 2005 Emissions exhaust emissions standards)

Offering Higher Fuel Efficiency, Cleaner Exhaust Emissions and Mazda’s “Fun-to-Drive” Personality

27 Social & Environmental Report 2006 Our new MPV is equipped with the new MZR 2.3L DISI TURBO engine, combining unparalleled performance with superb environmental efficiency.

ulfilling Our Corporate Social F Responsibility by Making Fun-to-drive Cars In February 2006, Mazda introduced the Hidetoshi Kudou Staff Manager Masatoshi Shirane all-new Mazda MPV minivan, fully Engine Testing and Shop Manager, Yagi Shop remodeled for the first time in seven years. Research Department Mazda Nara Co., Ltd. This model was equipped with the MZR 2.3L DISI TURBO engine, tuned especially I Was Inspired by a Customer’s Almost Every Customer Who Takes Comment, “I Would Like to Thank a Testdrive Is Amazed at How the for the MPV. Since going on sale in 1990 the Developers for All Their Efforts” Vehicle Delivers Above Expectations as Japan’s first genuine minivan, the Mazda MPV has captured a leading share Development of the DISI engine with an eye to Before the all-new Mazda MPV went on sale, I of the domestic market. The downsized commercialization began nearly 10 years ago. went to a test track in Hyogo Prefecture DISI TURBO on this model is indicative of Even though we knew the DISI had excellent (Japan) to take part in a Mazda-sponsored potential, we had to overcome many technical test drive. Other manufacturers’ vehicles in the Mazda’s policy for future vehicle hurdles to make the performance worthy of same class were lined up there, and we took manufacture. Meeting the SU-LEV the cost. Incorporating the turbo enabled us to each round one lap of the course. I was standards, the vehicle offers top class deliver a product we could be satisfied with in amazed at the substantial difference in environmental performance as well as terms of output, as well as fuel efficiency and vehicles. I have some mechanical experience, clean exhaust emissions. so I tend to check out the performance power and acceleration on a par with Naturally I am pleased that we succeeded in details. I was impressed at the level of 3.5-liter engines. The all-new Mazda MPV commercializing the engine, but what makes perfection everywhere I looked, even in terms will substantially change traditional notions me even happier is to feel that it exceeds of operating noise and engine vibration. of and play a key role in customers’ expectations. “What an excellent Nearly all the customers who take the MPV Mazda’s future. engine—both powerful and easy to service! I for a test drive at our shop are pleasantly would like to thank the developers for all their surprised. They all say that it exceeds their Mazda are incorporating the DISI efforts.” Reading this customer comment on expectations for driving comfort. I hope Mazda TURBO engine into other types of vehicles our website brought tears of joy to my eyes. will run more commercials featuring this model as well. Examples are the Mazda CX-7, a Customers have truly understood our design so that more people will think, “I’d like to take new crossover SUV that went on sale in intention, making the 10 years I spent working that for a drive.” away with my colleagues all the more the North American market in summer of worthwhile. 2006, and the (known as Mazdaspeed Axela in Japan and Mazda3 The DISI engine development team MPS in other key regions, including Europe, Australia and New Zealand). Zoom-Zoom describes the love of motion experienced as a child. Starting from this concept, we intend to continue reducing the environmental impact of our vehicles while maintaining the fun-to-drive quality. In this way, we believe we can deliver Mazda’s unique value and fulfill our social responsibilities.

Social & Environmental Report 2006 28 Our new MPV is equipped with the new MZR 2.3L DISI TURBO engine, combining unparalleled performance with superb environmental efficiency.

ulfilling Our Corporate Social F Responsibility by Making Fun-to-drive Cars Hidetoshi Kudou In February 2006, Mazda introduced the Masatoshi Shirane all-new Mazda MPV minivan, fully Staff Manager Engine Testing and Shop Manager, Yagi Shop remodeled for the first time in seven years. Research Department Mazda Nara Co., Ltd. This model was equipped with the MZR 2.3L DISI TURBO engine, tuned especially I Was Inspired by a Customer’s Almost Every Customer Who Takes for the MPV. Since going on sale in 1990 Comment, “I Would Like to Thank a Testdrive Is Amazed at How the the Developers for All Their Efforts” Vehicle Delivers Above Expectations as Japan’s first genuine minivan, the Mazda MPV has captured a leading share Development of the DISI engine with an eye to Before the all-new Mazda MPV went on sale, I of the domestic market. The downsized commercialization began nearly 10 years ago. went to a test track in Hyogo Prefecture DISI TURBO on this model is indicative of Even though we knew the DISI had excellent (Japan) to take part in a Mazda-sponsored potential, we had to overcome many technical test drive. Other manufacturers’ vehicles in the Mazda’s policy for future vehicle hurdles to make the performance worthy of same class were lined up there, and we took manufacture. Meeting the SU-LEV the cost. Incorporating the turbo enabled us to each round one lap of the course. I was standards, the vehicle offers top class deliver a product we could be satisfied with in amazed at the substantial difference in environmental performance as well as terms of output, as well as fuel efficiency and vehicles. I have some mechanical experience, power and acceleration on a par with clean exhaust emissions. so I tend to check out the performance Naturally I am pleased that we succeeded in details. I was impressed at the level of 3.5-liter engines. The all-new Mazda MPV commercializing the engine, but what makes perfection everywhere I looked, even in terms will substantially change traditional notions me even happier is to feel that it exceeds of operating noise and engine vibration. of minivans and play a key role in customers’ expectations. “What an excellent Nearly all the customers who take the MPV Mazda’s future. engine—both powerful and easy to service! I for a test drive at our shop are pleasantly would like to thank the developers for all their surprised. They all say that it exceeds their Mazda are incorporating the DISI efforts.” Reading this customer comment on expectations for driving comfort. I hope Mazda TURBO engine into other types of vehicles our website brought tears of joy to my eyes. will run more commercials featuring this model as well. Examples are the Mazda CX-7, a Customers have truly understood our design so that more people will think, “I’d like to take new crossover SUV that went on sale in intention, making the 10 years I spent working that for a drive.” the North American market in summer of away with my colleagues all the more worthwhile. 2006, and the Mazdaspeed3 (known as Mazdaspeed Axela in Japan and Mazda3 The DISI engine development team MPS in other key regions, including Europe, Australia and New Zealand). Zoom-Zoom describes the love of motion experienced as a child. Starting from this concept, we intend to continue reducing the environmental impact of our vehicles while maintaining the fun-to-drive quality. In this way, we believe we can deliver Mazda’s unique value and fulfill our social responsibilities.

Social & Environmental Report 2006 28 Mazda and the Global Environment

evelopment of the Unique Water based paints commonly used etting Closer to Solving All D Three Layer Wet Paint System by European and Japanese G the Problems of Vehicle Coating Coating has always been the process manufacturers have low VOC content. As its name implies, the Three Layer Wet that creates the greatest environmental However, water is difficult to vaporize, Paint System is a one-step baking and burden during automobile production. necessitating special air-conditioning and drying coating method that applies three After electrodeposition coating drying facilities. This pushes up energy layers in succession—primer coat, base (e-coating) process to prevent corrosion, consumption and raises CO2 emissions coat and clear coat—while still wet, paints that contain solvents such as by 5% compared with conventional without drying in between. By eliminating toluene and xylene are applied in primer techniques. The VOC combustion the drying process formerly required after coating processes and top coat method frequently employed by North applying the primer coat, CO2 emissions processes. The volatile organic American car makers reduces VOC are reduced 15%. Moreover, a new low compounds (VOC) generated during emissions just by adding special solvent content paint jointly developed these procedures account for about combustion equipment to burn up the with paint manufacturers, applied with 95% of total emissions for the entire organic solvents in the coating process. high-precision coating equipment production process. Moreover, each However, the combustion itself raises enables gains in coating efficiency coat requires its own baking and drying CO2 emissions by 20%-60%. These leading to reductions of 50% in VOC process and these are responsible for methods are no longer appropriate for emissions. In addition, by applying the roughly 60% of all CO2 emissions. the current age, when the emphasis is primer coat and top coat in the same Coating processes recently adopted on the urgent issue of preventing global booth we have managed to streamline by many automobile manufacturers in warming. our production lines. Japan and overseas to reduce the Mazda has developed the unique Until recently, it was thought that using environmental impact have only targeted Three Layer Wet Paint System, the first a wet paint system would lead to VOC emissions. These have, in fact, technology in the world to reduce VOC problems of paints mixing between the actually boosted CO2 emissions. and CO2 emissions simultaneously. successive layers. For this reason other The First Coating Technology in the World that Simultaneously Reduces VOC and CO2 Emissions

Coating Process and VOC and Water based Conventional Low solvent Comparative Cross-section of Coating CO2 Emission Volumes paint paint content paint Conventional coating

Coating process VOC CO2 Coating using water based paint Clear coat CO2 Base coat 25g/ temperature and humidity control equipment Primer coat

CO2 CO2 Base CO2 Clear CO2 E-coat coat coat Steel plate Baking Baking Preheating Baking 5% increase 60% reduction compared with compared with conventional Three Layer Wet Paint System using E-coating Primer coating Top coating conventional coating coating conventional paint Coating using the VOC combustion method CO2 Exhaust CO2 25g/m2 Clear coat VOC combustion equipment Base coat

CO2 CO2 CO2 Primer coat Base coat Clear coat 20%~60% E-coat increase Baking Baking Baking 60% reduction compared with Steel plate compared with conventional E-coating Primer coating Top coating conventional coating coating Three Layer Wet Paint System using newly Mazda’s Three Layer Wet Paint System developed paint 34g/m2 VOC Combined process High-efficiency coating Clear coat CO2 CO2 Inter- Base Clear CO2 mediate coat coat coat Base coat Primer coat Baking Baking Baking 50% reduction 15% reduction compared with compared with E-coat conventional conventional E-coating Primer coating Top coating coating coating Steel plate

29 Social & Environmental Report 2006 companies’ coating techniques require a drying stage following the intermediate coat. Mazda overcame this issue through innovations such as the newly developed interface control resin that was added to the paint. The Three Layer Wet Paint System also manifests a deep tone finish that is unique to this method. Mazda commenced development of this technology in 1994. The initial objective was cost reduction for two-tone paints. In 1998, we expanded the horizons of the project to encompass the coating for the full car body, and added improved product value, productivity and environmental efficiency to the list of desired benefits of this technology. We established a target to develop a single solution to all these issues. The perfected Three Layer Wet Paint System was introduced after four years of experimental verification and has been adopted across The Three Layer Wet Paint System all domestic Mazda production facilities. and improved product value and initial electrodeposited anticorrosive evamping the Undercoating productivity, the Three Layer Wet Paint coating process; and the other is R Process and Using Water Based System may well become the international developing “low-energy aqueous Three Paints to Achieve the Ultimate Three standard for the whole . Layer Wet Paint System technology” for Layer Wet Paint System This pioneering technological the application of water based paint to Response to Mazda’s unique Three Layer development has been awarded the make the entire procedure even more Wet Paint system technology has been Environment Minister’s Prize, the METI environmentally friendly. sizable, and numerous domestic and (Ministry of Economy, Trade and Industry) Mazda has developed a state-of-the-art overseas automobile manufacturers have Minister’s Prize and various other awards. technology that may well become the come to inspect the factory. In addition, Currently, Mazda is conducting new international standard for vehicle coating; through a capital tie-up, Ford Motor research and development to further the process which is currently the greatest Corporation is investigating the feasibility of improve this internationally commended obstacle to environmentally friendly introducing this technology to its plants technology. The R&D has two major automobile production. We will continue to worldwide. With its additional benefits in focuses. One is upgrading the process to pursue the ideal of a single solution to all terms of reduced environmental impact, reduce energy consumption during the the issues facing the coating process.

Teruo Kanda Masakazu Painting & Plating Engineering Watanabe Group Manager Kou Yoshida Painting, Trim & Final Assembly Automotive Coatings Automotive Paint Division Engineering Department Nippon Paint Co., Ltd. Kansai Paint Co., Ltd

The Mazda Three Layer Wet Paint System The Latest Paint Compositions Born The Satisfaction of Participating in Is a Combination of Coating Technologies from Upgraded Processes a World-leading Project

The Three Layer Wet Paint System is a combination The paints for the Three Layer Wet Paint Achieving the extremely precise specifications of of diverse technologies including production System have been developed from the latest paint composition necessary for the wet process design, paint composition, coating paint composition designs, employing resins to application of different types of paints was an equipment design and of course coating prevent mixing between the first and second extremely difficult development challenge. technology. We coordinated the targets of the layers and adding components to improve the However, it was a privilege to participate in this internal departments and paint manufacturers so we physical properties of the paint mix. pioneering joint project. It propelled our could all work in accord towards the ultimate goal. Surmounting each difficulty has brought a sense company’s rheology (paint fluidity) technologies, The widespread adoption of the Three Layer of achievement, and we have now jointly achieving interfacial control between the first Wet Paint System technology is desirable from applied for a patent for our new product. This and second layers, and brought us the the standpoint of the global environment. kind of thing makes you glad to be an engineer. satisfaction of attaining paint characteristics that However, it is not a simple technology that can be We shall continue working on maintaining or surpass those of conventional paints. introduced merely by supplying the right paints. improving the basic functions of automotive We look forward both to driving our We have to make the technological information as paints, and developing ever more environmental technologies onward and to accessible as possible if we want to broaden its environmentally friendly products. building mutually beneficial relationships. application throughout the industry.

Social & Environmental Report 2006 30 Mazda and the Global Environment Mazda Develops High-Strength Heat-Resistant Bioplastic for Use in Vehicle Interior Parts in Collaboration with Industry-academia-government

contained in plants, so the energy used ioplastic with High Strength and *2 The CO2 discharged during decomposition and B during production is approximately 30% combustion of bioplastics is offset by the CO2 that the Heat Resistance plants, which are used to produce the plastic, absorb Currently, petroleum-derived plastics are lower than for a typical plastic, such as through photosynthesis. Carbon-neutral is a used in various parts of automobiles. New polypropylene. In addition, the bioplastic’s characteristic of materials that do not increase or decrease the amount of CO2 in the atmosphere. materials are being sought that eliminate high rigidity means thinner parts can be petroleum-resource dependence, cut CO2 molded, which leads directly to savings in ntegrating Regional Technologies emissions and enable fuel economy to be the amount of raw plastic needed. I improved through decreased car This research was started in 2004, In bodyweight. The bioplastics presently collaboration with industry-academia- used in household electronic products, government. It was supported by the however, lack the strength (impact Ministry of Economy, Trade and Industry’s resistance) and heat resistance required “Consortium R&D Projects for Regional for automotive applications. Revitalization” program. This program In collaboration with industry-academia- aims to revitalize local economy through government,*1 Mazda has developed the the creation of new industries and world’s first bioplastic that can Bioplastic enterprises by joint research projects. successfully be employed in car The Hiroshima area is home to production. This material boasts sufficient The Carbon Cycle world-acclaimed technologies in the field surface quality, to facilitate use as interior of automotive plastic module parts, led by Plants, trim and the strength and heat resistance CO2 Starches Mazda and G.P. Daikyo Corporation. In Water corn, Sugars required for exterior automotive etc. addition, the region’s history of brewing has applications. The improvements have Photosynthesis generated a wealth of fermentation been achieved through additives to technology (biotechnology) expertise. One Biological Thermal Fermentation conventional bioplastics, increasing Recycling Recycling core group made up of Hiroshima (Decom- (Incineration) strength (impact resistance) three-fold and position) University, Nishikawa Rubber Co., Ltd., and raising heat resistance by 25%. Chemical Recycling Lactic the Western Hiroshima Prefecture Industrial Furthermore, while manufacturing acid Research Institute greatly advanced methods of existing bioplastics have been knowledge on biodegradable resins through restricted to press molding because of the its work on microbiological decomposition. Materials materials’ properties, the newly developed Recycling Integrating regional technologies in this way bioplastic can be shaped using injection was the springboard that led to the research molding equipment that is commonly End-of- achievements. life Parts Polylactic used in automotive parts production. This parts acids Mazda will continue to commit to expands the range of parts that the bioplastics research and development in bioplastic can be used for. • Plant resources (economy of fossil resources) concert with the local region, in order to • Carbon-neutral 1 Hiroshima University, Nishikawa Rubber Co. Ltd., • Recyclable materials continue developing products over the * Western Hiroshima Prefecture Industrial Research Institute, G.P. Daikyo Corporation, the Japan Steel next few years. Works, Ltd., Kinki University School of Engineering, Nishikawa Kasei Co. Ltd., National Research Institute of Brewing, Yasuhara Chemical Co. Ltd. and MANAC Examples of Parts Applications Inc., and Mazda Motor Corporation (two universities, seven companies and two research institutes). Bioplastic applicable parts

educing CO2 Emissions, Energy RUse and Materials Consumption Bioplastics are carbon-neutral*2 materials derived from plants. They also reduce the consumption of fossil fuels, thus producing less CO2. Moreover, the production process involves the fermentation of starches and sugars

31 Social & Environmental Report 2006 FY2005 Performance Report

With Our Customers 33

With Our Business Partners 41

With Shareholders and Investors 43

With Our Employees 45

With Communities and Societies 51

With the Global Environment 57

Social & Environmental Report 2006 32 FY2005 Performance Report With Our Customers

In order to be a company that wins further acclaim from its customers, Mazda is committed to providing products and services that reflect customer expectations, with the highest quality and safety levels, and offering comprehensive support worldwide.

In Order to Increase Customer Responding to a Variety of Customers Satisfaction Levels

Three Initiatives to Boost Customer Satisfaction Customizing Vehicles with the Web Tune Factory (BTO Site) Raising customer satisfaction is the core focus of Mazda’s Launched in February 2001, the Web Tune Factory was the first corporate activities. We are implementing the following three Internet site in the automotive industry to provide sales of approaches in this regard. built-to-order cars. At any time, potential customers can use the Web Tune Factory website to combine a selection of features and components, confirm 1. Improve product quality We strive to achieve an industry-wide top level of customer the exterior and interior appearance, browse price estimates and vehicle satisfaction and product quality schedule an appointment with a sales representative. 2. Improve overall customer satisfaction (CS) During FY2005, 12 car lines (including special editions) were We strive to achieve an industry-wide top level of customer added to this service, with a new function to compare options and satisfaction and actively promote customer satisfaction the equipment features activities throughout the complete cycle of vehicle production-delivery-replacement (sales, services, parts and accompanying different model distribution) grades. The dealership version has 3. Create attractive products already been highly praised by a We strive to create products based on the Zoom-Zoom rapidly growing number of users. spirit, and enrich and enhance the lifestyles of our customers

Customization Projects That Enable an Exact Giving Real Consideration to Customers’ Opinions Response to Needs Mazda takes the opinions and requests of its customers very Mazda Engineering & Technology Co., Ltd., a member of the seriously, as this is the starting point for creating better products. Mazda group, performs a number of services including a Special In February 1984, Mazda established the Mazda Call Center to Needs Customization Project for the development of vehicles for field domestic inquiries, requests and complaints, and to provide people with special needs; a Pleasure Customization Project and consultation. a Business Customization Project for vehicles, such as refrigerated The center has a staff of approximately 50 people to respond to vehicles along with other specialized features. Our comprehensive customers who can lodge inquiries through a toll-free telephone services, including design, R&D and accessories development service or through the Mazda website. allow us to precisely meet any need, regardless of the order During FY2005, approximately 76,000 queries were dealt with, volume, which is a something not to be overlooked in this and feedback on all the valuable opinions and requests motorized society. concerning products and services was directed back to the relevant company departments. Such feedback is highly constructive in raising the level of customer satisfaction through product development, sales and services. MPV automatic second-row lift-up seat Mazda Call Center

System for Improving Customer Satisfaction and Responding to Customers Mazda

Sales Customer Mazda departments service domestic departments dealers implementation

Manufacturing departments Partnerships Customer Quality advice Customers departments departments Technical departments Mazda Call Center Titan refrigerated truck

33 Social & Environmental Report 2006 Primary communication objectives: Improve customer satisfaction/Understand customer needs/Provide appropriate and clear information/Respond to recalls, etc./Provide convenient after-sales service Primary communication methods: Mazda Call Center /Internet inquiry customer interface/Domestic and overseas dealerships

Universal Design—creating Cars That Are Easy Protecting Customers’ Personal Information to Use for Everyone We are implementing universal design as part of our drive for user-friendly cars. The basis for this is a driving position not dependent on a Mazda has always taken seriously the need to handle the person’s physical build, and seat arrangements that can be personal information obtained from customers in the course of effortlessly changed by anyone regardless of strength. We are its business activities with the utmost care. In line with the aggressively pursing these ideals based on the cornerstones of enactment of the Protection of Personal Information Act on “ease of posture and movement,” “simple and easy operation,” April 1, 2005, Mazda established its own Guidelines for “physical and functional comfort,” and “safe use.” Protection of Personal Data on March 9, 2005. These are For example, the all-new MPV, introduced in FY2005, posted on Mazda’s website. features large sliding doors on both sides for easy access to Furthermore, inquiries concerning the handling of personal the third row of seats. Moreover, the third row seats can be information, disclosure of confidential data and related issues folded using an electric motor, thereby avoiding strain for are dealt with by the Mazda Call Center. women and elderly passengers. On July 7, 2005, e-mail addresses for 86 students who had registered on the graduate employment website of a Mazda dealership affiliate group were forwarded with information on an employment seminar for prospective 2006 graduates. Mazda publicly apologized to those concerned and undertook thorough measures to prevent a recurrence.

Guidelines for the protection of personal information

Wide-aperture sliding doors on both sides

Responding to Customer Requests Worldwide Requirements are varied depending on the destination country, its culture and its preferences, as well as based on the inclinations of individual customers. In pursuit of better customer satisfaction all around the world, Mazda continually discusses and coordinates the cars desired by each market, including Mazda Motor of America, other distributors and R&D divisions in Europe, China, Southeast Asia, Australia and other countries and regions in which it operates. For example, the Mazda CX-7, which was launched in May 2006, was a model developed with a focus on the needs of the North American market. It was designed prioritizing the values of sporty and powerful car styling and SUV practicality while embodying the sports car spirit that symbolizes Mazda. Further, the Global Marketing Division has carried out personnel exchanges with Mazda’s overseas operations to encourage marketing representatives to obtain thorough knowledge of local product development and launch processes and to boost communication between R&D and other staff. Development from a woman’s point of view Development of vehicles for people with special needs

Mazda CX-7 Social & Environmental Report 2006 34 Providing Customers with Appropriate Aiming for a Dramatic Improvement and Easy-to-Understand Information in Quality

Close-up Mazda Quality Activities Explaining Functions Using Video Mazda introduced QC Circle activities in 1962 as a method to and Computer Graphics ensure it offers products that satisfy customers. In 1978, we commenced company-wide Mazda Quality activities in a drive Mazda is promoting the introduction of its Visual IT Presentation to further raise quality levels, expanding the scope of the (VIP) tool software at its dealerships in Japan. The VIP software program to cover products, services and work in general. allows difficult to explain product features such as safety In more recent years, we have extended the horizons of equipment to be clearly demonstrated using video, computer typically Japanese QC activities by proactively adopting new graphics and three-dimensional computer-aided design (CAD) internationally recognized methods and approaches, such as data that is actually employed during the development phase. Quality Engineering and Six Sigma. These have helped to The system has been extremely well received by customers. redefine our Mazda Quality activities and so raise the quality of Trial introduction of visual IT presentation tool began in July all that Mazda offers its customers. 2005, with successive expansion to 22 dealerships and 465 To attain this quality, Mazda Quality activities need to do outlets in Japan occurring from October 2005 through March more than improve business administration; they must also 31, 2006. improve the quality of management actions, the workplace By the end of March 2007, we plan to extend the system to environment, and each and every employee’s thinking and 42 dealerships and more than 700 outlets throughout Japan. conduct. Results of QC activities

Personal Message All-Mazda QC circle competition The Realism of the Visual IT Presentation System Has Been Well Received Continuous Quality Improvements Presentations on safety performance and Since the launch of the Mazda6 in 2002, Mazda’s new other subjects that are notoriously generation vehicles have been awarded numerous prizes difficult to grasp are greatly aided by the throughout the world. This is clear evidence of the high quality VIP tool’s video images and Hideto of Mazda’s cars, yet we persevere in our quest for ever easy-to-understand visuals. The system Yoshimura improved quality. has been enthusiastically received by Mazda Nara Co., Ltd. Under the slogan “Self-Initiated Change and Dramatic Quality customers, as they can experience a Improvement,” Mazda is seeking company-wide quality sense of realism that is absent using only improvement. Toward this aim, Mazda has printed an catalog’s during a presentation. eight-point strategy including, “innovations in development quality,” and is further expanding its Mazda Quality activities. Recent awards for Mazda vehicles

35 Social & Environmental Report 2006 FY2005 Performance Report With Our Customers

The Quality Management System Recalls during FY2005 Mazda received ISO9002 approval for all its fields of business In Japan, there were 14 recalls in effect through FY2004, as except design and development in November 1994. In June part of an upward trend. This figure decreased to 11 during 1996, Mazda became the first Japanese automobile manufacturer FY2005. The fall is attributable to continuous efforts toward to be awarded ISO9001 certification throughout the entire recurrence and preemptive prevention activities in all areas company. Designed for the automotive industry, this standard is relating to quality. We shall continue to promote these activities the most wide ranging, covering design and development through in the future. purchasing, production, sales and after-sales service. Detailed information on recalls and improvement measures is Furthermore, each year we conduct approximately 170 posted on the Mazda website. in-house inspections to maintain and upgrade the Quality Recalls and improvement measures Management System built on the accords of ISO9001.

Taguchi Award From the Japan Quality Engineering Society After-sales Service and In June 2006, the Production Engineering Division was awarded Maintenance Measures the first Taguchi Award* from the Japan Quality Engineering Society for its quality engineering. This was given in recognition of contributions to performance arising from developments in Developing Convenient, Easy-to-Use Services production technology, such as the introduction of a new Mazda prioritizes safety and comfort of use in its cars, from management method applying quality engineering to quality purchase through to disposal. In addition, we are developing control in a factory production line and systematic measures products that support environmental issues through low fuel resulting in proof of the effectiveness of quality engineering. efficiency and exhaust emissions and place low burden on both

This award is bestowed to companies and organizations that reinforce its nature of the customer and the environment during maintenance. These * areas such as research, development and production, achieve steady results in aims are concurrent with establishing thorough after-sales business performance, and demonstrate the value of quality engineering to further improve its quality by systemically implementing quality engineering. service. Maintenance quality is underwritten by using nationally Recall Response and System qualified mechanics and factory parts. In addition, we provide original service products, including inexpensive legally stipulated periodic check package. During FY2005, we revamped the online Mazda After-sales Response to Recalls Service Information Guide to provide more extensive Creating a perfect car is the responsibility of a manufacturer. information. Although Mazda puts forth every effort to achieve this goal, unfortunately defects do arise from time to time. In such cases, quality information relating to the defect is normally communicated through a sales company and quality improvements are implemented based on this data. If a recall is necessary, we implement one appropriately and in conformance with appropriate laws and regulations. Our response to customers and supervisory bodies is swift and appropriate, as described below.

Documents submission to relevant authorities in line with applicable laws for each country Notifications to customers by direct mail and in newspapers, and explanations given to dealerships Disclosure of recall information on website

To ensure that recall procedures are being conducted appropriately, external audits and confirmation are carried out by the country’s relevant authorities and confirmed by related Mazda departments.

Social & Environmental Report 2006 36 Global Sharing of Technology and Quality Information Close-up The quality data compiled from the market through after-sales Hosting Service Skills Competition service activities is used to improve cars and upgrade repair technologies. This technological data on improvements is used To help develop dealership service staff by improving their as feedback to service facilities worldwide. customer response skills and upgrading maintenance Further, we have accelerated supply of data to all the technological prowess, we have held annual national dealerships and are enhancing the quality and speed of competitions to showcase the winners of regional competitions after-sales service using technological data from Japan and among service staff since 1963. overseas. This initiative has been adopted in regions Support for Dealerships worldwide, and on August 2, 2006, we held the second Global Service Engineering Contest in Hiroshima, Development of Diagnostic Equipment and Services attended by representatives for Mazda Cars from 13 countries. Mazda has developed original diagnostic equipment so that dealerships can properly improve the complex, advanced electronic control systems that are widely employed on recent Mazda cars. These units are now being supplied to dealerships. Our existing Worldwide Diagnostic System has been superseded by the all-new Mazda Module Diagnostic System (M-MDS), which was officially introduced to the market in December 2005. The development of M-MDS involved analysis of feedback from domestic and overseas dealerships. Accordingly, the new system incorporates an efficient function for faultfinding and diagnosis of the entire vehicle electronic control system, in Personal Message response to frequent requests. Providing of maintenance manuals for inspections and servicing Supplying special tools to preserve service quality

Implementing Technical Training for Service Staff We have been conducting new model training to service staff at dealerships to explain the new functions and technologies employed when new models are launched. We also supply information relating to the functions, handling and maintenance of safety equipment mounted on these vehicles. From FY2005, separating from the new model trainings, we have initiated periodic safety training, which aims for deeper Winning the 42nd Mazda All-Japan understanding of the functions, operation and maintenance of Service Skills Competition Tooru safety equipment. During the actual competition, my mind Miyamae just went blank, but I did the best I could. (Front row, third from Mazda Training Center Taibi the right) In the future, I will work hard to improve TOKAI-MAZDA the level of customer satisfaction while Co.,Ltd. cultivating younger service advisors. Katsumi I couldn’t have got to the nationwide Wakabayashi contest on my own steam; not even with (Front row, fourth from the power of a team of three people. We the right) TOKAI-MAZDA won because we have the backup of our Co.,Ltd. branch’s entire service staff.

37 Social & Environmental Report 2006 FY2005 Performance Report With Our Customers

Heightening the level of Car Safety Active Safety Technology Performance

Safety Performance—Pivotal in Car Production Dynamic Stability Control System for Side Skid Mazda considers safety one of the fundamentals in creating Our Four-Wheel Antilock Braking System (4W-ABS), Electronic cars and is pursuing and promoting the development of various Brake Force Distribution System (EBD) and braking assistance related technologies and equipment. Our target is to raise improve braking performance. In addition, we employ a levels of safety performance. Accordingly, we are pursuing Dynamic Stability Control (DSC) system to the car from research and development programs to realize safety skidding sideways. performance levels that exceed worldwide standards. Understeering Control Over-steering Control Mazda’s Safety Policies Mazda has its own safety policy and is reinforcing its research and development on safety issues. Safety technology development starts with the use of active safety technologies to prevent traffic accidents and passive safety technologies to reduce injuries in the event of an accident. Beyond this, we are pursuing leading-edge research and development from various standpoints using IT technologies to bring about a safer Vehicle direction Vehicle direction automotive society, evidenced in the Mazda Pre-crash Safety System that is employed on the all-new MPV and the Understeer occurs when the vehicle Over-steering occurs when the Advanced Driver-Support Technologies that were showcased cannot follow the intended path of vehicle turns too sharply into the at the 2005 Tokyo Motor Show. Mazda is also involved in safe steering. DSC reduces engine direction of steering. Sideskid of the torque and applies the brakes to back tires is controlled by applying driving promotion activities, focusing on correct driving position, the inner-side wheels to prevent the brakes to the outer-side wheels. fastening of rear seatbelts and other themes. front tire sideskid.

Mazda Safety Policies

Based on an awareness that safe cars are one of the foundations of a worry-free life, Mazda is committed to: 1. Researching the ways in which customers use our cars, and the traffic environment in which they are being used. 2. Deepening research into safety technology, and reflecting the results of this research in our products in a way that offers our customers the best available appropriate technology.

Social & Environmental Report 2006 38 FY2005 Performance Report With Our Customers

1 2 Two New Technologies Passive Safety Technologies New Mazda MX-5 Equipped* with SRS* Side Airbags Adaptive Front Lighting System (AFS)/Pre-crash Safety System with Head Protection One is an Adaptive Front Lighting System (AFS) that adjusts We recently introduced the first Mazda MX-5 equipped with the headlamps’ lowbeams by turning side to side in newly developed side air bags. Previous side airbag systems accordance with the vehicle speed and steering angle to boost Highly Rigid and Extremely Safe Passive Safety were designed to restrain the head after the chest portion was visibility during cornering and other maneuvers. The maximum The Mazda Advanced Impact-energy Distribution and Absorption deployed. In the new airbag system, the chest and head angle of rotation is 20º for the right headlamp and 15º for the System is an omnidirectional collision absorption body structure. restraining portions are housed in separate compartments so left. These large angles further illuminate the vehicle’s path This structure disperses the impact energy from a collision they can deploy simultaneously, shortening the interval between when cornering. throughout the vehicle, reducing deformation of the cabin. Mazda collision and deployment. Another one is the Mazda Pre-crash Safety System, which has confirmed the integrity of the structure in numerous crash Also, the head bag and chest bag are equipped with a employs the latest collision prediction technologies to minimize tests beyond those that are legally stipulated aiming at exceeding connecting mechanism to prevent reverse flow, ensuring optimal injuries to occupants in the event of a collision. This system the highest JNCAP*1 rating for crashworthiness. internal pressure distribution. As a result of this development—a recognizes vehicles ahead, oncoming vehicles and other Potential impact shocks to occupants in the driver and front world first—the airbags appropriately protect the occupant’s obstacles using milliwave radar, and if a potential collision is passenger seats are mitigated by front airbags and occupant head and chest at the same time, even given the small amount detected, a warning is given via a buzzer and a light. Moreover, restraints have pretensioner and load-limiter mechanisms. In of deployment space that is available in a convertible. it will automatically apply the brakes to reduce impact speed if addition, other systems that have been introduced include a front *1 This is a factory-installed option on all models. the driver has failed to apply the brakes. Simultaneously, the seatbelt with pretensioners and load limiters, front seats that *2 SRS is an acronym for Supplemental Restraint System. seatbelts are pre-tensioned to minimize the slack in the seatbelt reduce head and neck injury a neck impact minigation front seat, a webbing and restrain the occupants even more effectively. crushable brake pedal and a head impact-absorbing SRS Side Airbags with Head Protection For further details, see “Mazda and the Global Society” on With the AFS Without the AFS interiorsimpact absorbing soft interior. headlamps rotate in the direction pages 17 and 18. of movement. 1 JNCAP stands for the Japan New Car Assessment Program, which is run by an * independent government body, the National Agency for Automotive Safety & Victims’ Aid (NASVA) Mazda5 Wins Highest Crash Safety Rating From EU and Japanese New Car Testing Agencies In Japan crashworthiness test of features of the FY2005 Mazda Advanced Impact Distribution and Absorption Automobile Assessment*1 accorded a maximum six-star rating System of the New MPV for driver and passenger seats to the Premacy (Mazda5) minivan, which went on sale in February 2005. This evaluation takes into account safety in the event of a collision. The Euro NCAP*2 ratings announced in September 2005 also evaluated the Mazda5 highly, giving it a five-star rating— the highest available—for adult occupant protection safety. This 1 Vehicles safety performance evaluations that have been started since 1995 by Japan’s * Ministry of Land, Infrastructure and Transport and the National Agency for Automotive marks the first time ever for a minivan to earn top rankings in Safety and Victims’ Aid, evaluate vehicle safety performance. both the Japanese and European tests. 2 Since 1997, the European New Car Assessment Programme, or Euro NCAP, has * been conducted by an independent institution comprising the transportation ministries Promoting the Development of Advanced of individual European countries. This program evaluates automobile safety Safety Vehicles (ASVs) performance.

Mazda is committed to developing advanced technologies and comprehensive safety measures focusing on the traffic Front Seatbelt Pretensioners and Load Limiters environment and people’s behavior. Pretensioner Load Limiter We are participating in the Japan Ministry of Land, At the initial After having Infrastructure and Transport’s ASV Development Promotion stage of been tightened, Project to develop future safety technologies from the very impact, the the seatbelt seatbelt slack tension eases beginning. In addition, Mazda commenced research and is minimized to slightly to development aiming at public road testing in FY2008 for to restrain an relieve pressure occupant. on the chest. contribute to achieve a “society with the safest traffic in the world”, a project led by the government’s IT new innovation Front seats that reduce Crushable Brake Pedal strategy. head and neck injury In addition, we are participating in various other government-led projects which aim to create a safe traffic environment without accidents or traffic jams. These projects include the Driving Safety Support System (DSSS), Advanced Cruise-Assist Highway System (AHS), Smart Way, and Internet Intelligent Transport System (ITS). Optimal headrest positioning In a collision, the brake pedal mitigates damage to the neck from bracket disengages, preventing the the whiplash that can accompany a pedal from forcing its way into the slight collision. cabin and reducing potential 39 Social & Environmental Report 2006 damage to the driver’s legs. Social & Environmental Report 2006 40 FY2005 Performance Report With Our Customers

1 2 Passive Safety Technologies New Mazda MX-5 Equipped* with SRS* Side Airbags with Head Protection We recently introduced the first Mazda MX-5 equipped with newly developed side air bags. Previous side airbag systems Highly Rigid and Extremely Safe Passive Safety were designed to restrain the head after the chest portion was The Mazda Advanced Impact-energy Distribution and Absorption deployed. In the new airbag system, the chest and head System is an omnidirectional collision absorption body structure. restraining portions are housed in separate compartments so This structure disperses the impact energy from a collision they can deploy simultaneously, shortening the interval between throughout the vehicle, reducing deformation of the cabin. Mazda collision and deployment. has confirmed the integrity of the structure in numerous crash Also, the head bag and chest bag are equipped with a tests beyond those that are legally stipulated aiming at exceeding connecting mechanism to prevent reverse flow, ensuring optimal the highest JNCAP*1 rating for crashworthiness. internal pressure distribution. As a result of this development—a Potential impact shocks to occupants in the driver and front world first—the airbags appropriately protect the occupant’s passenger seats are mitigated by front airbags and occupant head and chest at the same time, even given the small amount restraints have pretensioner and load-limiter mechanisms. In of deployment space that is available in a convertible. addition, other systems that have been introduced include a front *1 This is a factory-installed option on all models. seatbelt with pretensioners and load limiters, front seats that *2 SRS is an acronym for Supplemental Restraint System. reduce head and neck injury a neck impact minigation front seat, a crushable brake pedal and a head impact-absorbing SRS Side Airbags with Head Protection interiorsimpact absorbing soft interior.

1 JNCAP stands for the Japan New Car Assessment Program, which is run by an * independent government body, the National Agency for Automotive Safety & Victims’ Aid (NASVA)

Mazda Advanced Impact Distribution and Absorption System of the New MPV

Promoting the Development of Advanced Safety Vehicles (ASVs)

Mazda is committed to developing advanced technologies and comprehensive safety measures focusing on the traffic Front Seatbelt Pretensioners and Load Limiters environment and people’s behavior. Pretensioner Load Limiter We are participating in the Japan Ministry of Land, At the initial After having Infrastructure and Transport’s ASV Development Promotion stage of been tightened, Project to develop future safety technologies from the very impact, the the seatbelt seatbelt slack tension eases beginning. In addition, Mazda commenced research and is minimized to slightly to development aiming at public road testing in FY2008 for to restrain an relieve pressure occupant. on the chest. contribute to achieve a “society with the safest traffic in the world”, a project led by the government’s IT new innovation Front seats that reduce Crushable Brake Pedal strategy. head and neck injury In addition, we are participating in various other government-led projects which aim to create a safe traffic environment without accidents or traffic jams. These projects include the Driving Safety Support System (DSSS), Advanced Cruise-Assist Highway System (AHS), Smart Way, and Internet Intelligent Transport System (ITS). Optimal headrest positioning In a collision, the brake pedal mitigates damage to the neck from bracket disengages, preventing the the whiplash that can accompany a pedal from forcing its way into the slight collision. cabin and reducing potential damage to the driver’s legs. Social & Environmental Report 2006 40 FY2005 Performance Report With Our Business Partners

Mazda procures parts and equipment from suppliers spread throughout the world and employs distributors in Japan and overseas to conduct sales and provide services. Through fair and impartial business dealings with its suppliers and distributors, Mazda is helping to support environmental preservation and compliance.

Encouraging Green Procurement Relationships with Suppliers In FY2005, Mazda updated its overall group structure in order to strengthen its environmental capabilities. As part of the changes, in May 2005 the Purchasing Division issued the Fundamental Philosophy of Purchasing Green Procurement Guidelines. These require suppliers to In 1994, Mazda stated its basic purchasing policy within its engage proactively in environmentalism. purchasing management regulations. The policy stated that The Green Procurement Guidelines request that suppliers set Mazda would, in the fullest sense of coexistence and mutual up Environmental Management System, correctly manage prosperity, engage in research and production and seek to substances with environmental impact and designate a person raise competitiveness. It also said we would build open and fair responsible for environmental issues. Mazda encourages business relationships to ensure sustainable growth and raise suppliers’ environmental preservation activities and prioritizes our level of contribution toward social and economic purchases from suppliers that have established environmental development. preservation systems. Based on this policy, we provide fair and impartial In regard to Corporate Social Responsibility (CSR), in opportunities for all suppliers throughout the world. FY2005 the Purchasing Division also conducted activities to Mazda’s criteria for selecting suppliers include numerous support stronger compliance and environmental preservation factors. In addition to product quality, technical expertise, price, efforts by our five affiliated suppliers. delivery times and management, Mazda picks its suppliers based on their compliance systems and environmental initiatives. Promoting Communications with Suppliers We believe that the sustainable relationships we maintain with Requiring Suppliers to Obey Laws and Respect Human Rights our suppliers allow us to implement unified purchasing Mazda is well aware of the need to control the overall supply measures and solve difficult problems cooperatively, resulting in chain to ensure stable procurement levels and maintain combined growth. product quality. In addition, suppliers’ levels of compliance and Consequently, we seek to provide information concerning respect for human rights have become increasingly important medium and long-term sales and production strategies as early factors in recent years. For these reasons, Mazda requires all and completely as possible. suppliers to sign documents guaranteeing transactions involve Once a year, we hold round table conference with supplier no legal violations, no employment of forced labor and no executives at our supplier organizations, where we explain our human rights violations. This aggressive and thorough policy purchasing policies. Furthermore, Supplier Communication applies not only to suppliers with whom we conduct business Meeting is held monthly at the operational level. The meetings directly, but to the entire supply chain, including companies at are a means to communicate important measures and policies the secondary and tertiary level. from Mazda and provide an opportunity to keep abreast of suppliers’ activities related to environmental preservation and Suppliers (As of March 31, 2006) legal compliance. At purchasing liaison meetings, we distribute Number of Suppliers (Companies) communication sheets for suppliers to write down their Automotive parts 429 questions and comments. We have put in place a system to appropriately respond to any issues that arise. Materials, etc. 190

Equipment and tools 408

Total 1,027

Purchasing Cooperative Organization (Companies) Kanto Yokokai (Located in the Kanto region – around Tokyo) 63 Parts Kansai Yokokai (Located in the Kansai 52 manufacturers and Tokai regions – central Japan) Nishi Nihon Yokokai (Located in the Chugoku, Shikoku and Kyushu regions – 64 South West Japan) Providers of materials (raw materials, Yoshinkai 79 equipment, molds, etc.) Supplier Communication Meeting

41 Social & Environmental Report 2006 Primary communications objectives: cooperate in improving product quality, share information, etc. Primary communication methods: round table conference with supplier executives for suppliers, Supplier Communication Meeting, periodic audits, etc.

Evaluating and Recognizing Suppliers Sharing the Mazda Global Environmental Charter Once a year, a survey is conducted to clarify Mazda’s business In April 2005, we reviewed the Mazda Global Environmental status with each supplier. Based on the results, decisions are Charter. This defines our fundamental environmental policy made to continue transactions or not and whether any from a CSR standpoint, and details our policies concerning guidance is needed for improvement, and the results are sales and services. We also established a Sales and Services provided as feedback to suppliers. Environmental Committee to support and promote Also based on the results, the top suppliers receive awards environmentalism among vehicle and parts dealerships. at round table conference with supplier executives. Since the End-of-Life Vehicle Recycling Law came into effect Furthermore, some of the commended suppliers are nominated in Japan in January 2005, we have been supporting for the World Excellence Award, an award bestowed on Ford dealerships and responding to all relevant legal requirements. Motor Company’s top suppliers. Initiatives in Asia, the Pacific, the Middle East, Africa, the Caribbean and Central and South America Mazda works hard to communicate with distributors located throughout the world, with links extending well beyond Europe and the United States. These efforts enable us to customize sales and marketing strategies for each market. In addition to visiting dealerships on site, we invite representatives to Mazda and hold daily teleconferences. Also, in 2005 we held a test drive event in Hong Kong for the Mazda MPV (known as the Mazda8 in Hong Kong), which targeted local journalists. Furthermore, we held distributor meetings throughout the Near and Middle East and in Central and South America. Through all these varied opportunities, we were able Recognition of outstanding performance awards at to discuss brand strategy, the status of newly introduced round table conference with supplier executives vehicles and CSR initiatives. At an event in Thailand to mark the launch of the Mazda BT-50, distributors and staff from dealerships were afforded the Relationships with Distributors opportunity to test-drive the new vehicle and experience its virtues for themselves. Also, we periodically conduct satisfaction surveys at key Working with Distributors in Japan and Overseas distributors. The results are used to further improve our As of March 31, 2005, Mazda’s sales network consisted of 304 business and procedures. domestic dealerships, operating 1,156 outlets. Of these, 20 were consolidated subsidiaries and affiliated companies. Overseas, in 141 markets 132 distributors operate approximately 4,900 dealerships. As a manufacturer, Mazda is ultimately responsible for providing products and services. We are constantly working with these distributors to deliver and improve our products and services in Japan and overseas, from the viewpoint of the customer.

Key Domestic Sales Network (As of March 31, 2006) Distributors Dealerships

Mazda-affiliated sales companies 40 800

Mazda Enfini-affiliated sales companies 19 88

Mazda Autozam-affiliated sales companies 245 268

Total 304 1,156

Social & Environmental Report 2006 42 FY2005 Performance Report With Shareholders and Investors

Mazda seeks to ensure high levels of profits, to allocate them equitably and to disclose information to shareholders and other investors in a fair and timely manner, thereby maximizing its corporate value.

Basic Investor Relations Policy Communication with Shareholders and Allocation of Profits and Other Investors

Mazda conducts investor relations in line with its policy to Openly Accessable General Shareholders Meetings disclose information to stakeholders fairly and in a timely manner. Mazda hopes to enable as many shareholders as possible to Also, our policy on setting dividends each fiscal period attend its annual General Shareholders Meetings, which are stipulates consideration of various factors, including the excellent opportunities to learn about its policies. For this performance results and the company condition, tempered reason, Mazda schedules its general shareholders meetings on with the need to provide stable and sustainable dividends. In different days than the bulk of other companies. We also make FY2005, year-end cash dividends amounted to 5 yen per share a conscientious effort to answer shareholders’ questions—not of common stock. just to the extent required under corporate law but as fully as We also allocate a certain amount to internal reserves. These possible without violating corporate secrecy agreements. funds are used to pay for capital investments and research and development, which contribute to our improved Enhancing Disclosure competitiveness. In addition to publishing annual reports in English, Japanese and Chinese, Mazda has an extensive IR website. We also hold biannual financial results meetings as part of our commitment Financial Results of FY2005 to prompt disclosure of information. We are working to enhance our disclosure of information in Japanese to individual investors through a special IR Achieving Record Earnings and Profits e-newsletter launched in FY2004 and a dedicated section of our In FY2005, strong sales pushed up wholesales. A stronger website, “To Individual Investors” which was renewed in 2006. product mix coupled with the effects of a depreciated yen on the Information for Investors Relations exchange rates combined to deliver historically high earnings. During FY2005, consolidated net sales increased 8.3% from the preceding fiscal year, to 2,919.8 billion yen. Operating income grew 48.8% to 123.4 billion yen, and net income rose 45.7%, to 66.7 billion yen, resulting in record highs for both operating income and net income.

Mazda Momentum, Our Mid-term Management Plan On November 9, 2004, when announcing our first-half financial results for FY2004, we also revealed our long-term vision for the company 10 years ahead, and announced Mazda Momentum, our current mid-term plan. This plan is a roadmap for maintaining our current progress and creating a basis for strong future growth. Among Mazda Momentum’s targets for the end of FY2006 were a consolidated operating income of 100 billion yen, and a net debt-to-equity ratio of 100% or less. Both targets were achieved in FY2005, one year early. Information on Mazda Momentum

Mazda Momentum Commitments SRI Initiatives FY2006 Consolidated wholesales of 1.25 million units: target deferred Consolidated operating income of over 100 billion yen: achieved one year early Mazda has earned a “FTSE4Good” recommendation in Net debt-to-equity ratio of below 100%: achieved one year early recognition of its social responsibility investment (SRI) initiatives, Key Initiatives Reinforce R&D as judged by the FTSE Group. Strengthen key markets Enhance global efficiencies and synergies Leverage human resources

43 Social & Environmental Report 2006 Primary communication objectives: to explain operating performance to shareholders, to disclose information in a timely and impartial manner, to disclose information in an easily understood format, to boost business transparency Primary communication methods: various IR tools, financial results meetings, General Shareholders Meetings, IR office in the Financial Services Div., General Affairs Dept.

Net Sales (Consolidated) Capital Investment

(Billions of yen) (Billions of yen) 2,919.8 30,000 1,000 2,695.6 2,574.7 2,364.5 25,000 Converted to 800 * 72.1 2,094.9 12-month 67.9 20,000 equivalent value 600 56.6 45.6 15,000 44.0 400 10,000

200 5,000

0 0 2001 20022003 2004 2005 (FY) 2001 20022003 2004 2005 (FY)

Net Sales Breakdown by Region (FY2005) Research and Development Costs

(Billions of yen) 17.8% 1,200 Other: 519.2 billion yen 30.4% 95.7 1,000 94.9 90.8 Japan: 887.6 billion yen 87.8 87.8 800 FY2005 600 2,919.8 billion yen 400 22.9% Europe: 668.9 billion yen 200 28.9% North America: 843.9 billion yen 0 2001 20022003 2004 2005 (FY)

Operating Income, Net Income (Consolidated) Total Assets

(Billions of yen) (Billions of yen) 1,500 20,000 1,795.6 1,788.7 123.4 1,200 17,800 1,767.8 900 82.9 1,754.0 70.2 66.7 17,400 600 50.6 45.8 1,734.8 33.9 17,200 300 19.2 24.1 8.8 17,000 0 2001 20022003 2004 2005 (FY) 0 Operating income Net income 2001 20022003 2004 2005 (FY)

Net Income and Dividends per Share Shareholders’ Equity

(yen) (Billions of yen) 60 4,500 51.5 398.0 50 3,600 40 37.6 267.8 30 27.8 2,700 222.6 19.8 20 194.0 1,800 172.8 10 7.2 5 2 3 2 2 900 0 2001 20022003 2004 2005 (FY) 0 Net income per share Dividends per share 2001 20022003 2004 2005 (FY)

Social & Environmental Report 2006 44 FY2005 Performance Report With Our Employees

To provide an atmosphere where employees can feel enthusiastic about and satisfied with their work, Mazda provides employee training and development and welfare systems, and pays close attention to workplace safety.

Fundamental Human Resources Concepts Training and Development Systems That Support Employee Choice and Self-realization The Tobiuo (Flying Fish) Human Resources Mazda’s Tobiuo HR Management System includes extensive Management System career development, helping employees achieve the goals of Mazda aims to be first and foremost a company filled with choice and self-accomplishment. people who love their work. Toward this goal, in April 2003 we companywide skills development program implemented the Tobiuo HR Management System, based on a premise of career development support. The system Overview of Representative Education and Training Systems encourages employees to think and work voluntarily and Program Objectives and outcomes independently. This program enables all employees to We believe that providing individuals the opportunity to Optional training gain key business skills. Employees may demonstrate their full potential leads to their growth and (group training, e-learning) elect to undergo training during working hours. success, which is inextricably linked to achieving our corporate This elective program is designed to vision. Therefore, we seek to provide people with jobs and fashion middle managers into working environments that suit them best, and we will continue Leading Mazda 21 next-generation leaders by training them to develop various systems to support our employees. in strategic decision-making from a global viewpoint. Basic personnel data Mazda Business Leader Mandatory for all employees, the course Development (MBLD) aims to develop leaders who have a comprehensive viewpoint of the whole company. This training course is for young Employee Mazda success Skill Olympic training technicians who aim to be top success program performers at national and international level in the WorldSkills competition. Choice and self-realization This course aims to impart traditional core automotive techniques. One expert Provide the opportunity The right person in the Advanced Technical teaches two apprentices, providing direct to select a working right job works done well Skills Training course instruction on techniques that require a environment where and produces results. high degree of mastery. employees can utilize their personal strengths. This course teaches arc welding techniques to technicians aiming to be Promote balance between work and personal life Welding Skills Training Program Japan’s leaders in the field. Alumni of this course include seven national champions If work and play are both The Mazda brand is and 19 award-winners. enjoyable, employees will communicated to our feel fulfilled on a daily customers through our basis. products and services, which are a direct Mazda Technical College reflection of the vitality of our employees. A training institution recognized by Japan’s Ministry of Health, Labor and Welfare, the Mazda Technical College offers two-year Best match of people, work and rewards courses to high school graduates and selected employees. The The way employees are Better rewards are college aims to provide students with the basic skills and rewarded directly available for people who reflects their level of are performing well. techniques that are needed in a manufacturing workplace. The contribution. college runs a comprehensive curriculum of basic and applied skills and trains students to take responsibility for their own actions as members of a corporate culture.

45 Social & Environmental Report 2006 MBLD#6 Primary communication objectives: fair treatment and personnel evaluation, career development and growth support, respect for diversity, Work-Life Balance, a safe and comfortable working environment, health maintenance and improvement, excellent workforce–management relations Primary communication methods and contacts: career meetings, the Tobiuo consultation helpdesk, the Tobiuo management consultation helpdesk, the Female Employee Counseling Desk, the Human Rights Counseling Desk, the Health Promotion Center, the Labor-Management Council

Skill Olympics Training Program Advanced Technical Skills Training Course Training for the WorldSkills competition, which is held at This course began in 1996 to pass on core automotive skills regional, national and international levels involves a two-year and develop excellent technicians. During the two-year specialist program for employees under 21. This training helps program, one expert trains two apprentices on a personal technicians improve both their skills and mindset and raises basis. Upon completion of the course, students are awarded Mazda’s overall technical level. the title of “Production Engineering Meister,” and receive the Since 1962, we have sent 373 competitors to the national “Meister badge.” and international competitions. At the national level, 27 have At present, 24 subject courses are available in 13 fields—iron won and 145 have been prize-winners. We have had 4 winners casting, die casting, forging, powder alloys, heat treating, and 12 prize-winners at the international competitions. machining, engine assembly, axle assembly, assembly, stamping, car body, painting, and vehicle assembly. Close-up Between July 1996 and March 2006, 83 employees Mazda Business Leader Development completed the course, 39 Production Engineering Meisters were named. A further 9 people qualified as Hiroshima All employees take the MBLD* course, which commenced in Prefecture award-winning skilled workers, 10 as July 2000 and focuses on growing business leaders with a Contemporary Master Craftsmen and 6 have won the Medal companywide perspective, promoting the success of business with Yellow Ribbon. plans and the innovation of corporate culture. In one session, MBLD participants receive information on the business side of Mazda from an instructor who is also their supervisor in the company. In the following session, students become the teachers, explaining business strategies they have just learned in their own words. Participants learn to make the connection between operational and companywide issues. This program helps to spread management strategies throughout the company, and helps supervisors develop a Close-up deeper leadership consciousness. Training System for Sales Staff In FY2005, the theme of the sixth course, MBLD#6, was “Self-Initiated Change and Dramatic Quality Improvement.” The Sales Development Department has special training courses to improve the skills of dealership managers and sales * Mazda Business Leader Development staff. In FY2005, we strengthened our personnel training for young employees and introduced a number of development programs focused on enhancing management. In FY2006, we will divide the previous year’s management curriculum into specific modules. These efforts should improve our ability to respond to customers throughout the entire dealership network, and raise customer satisfaction levels. Sales development training details

Personal Message Personal Message Training That’s Easily Applicable MBLD Directly Affects Daily Operation to Customer Relations The Purchasing Department, which buys During our second-year sales staff training, some 70% of the parts that go into Mazda we were divided into groups, where we vehicles, is keenly aware of the direct learned ways to propose car options to connection between the quality of the parts meet customers’ preferences. The training Hokuto we procure and the overall quality of the Fumiko made use of role-playing exercises, which Tokumoto proved to be immediately beneficial in Osaka Mazda Sales vehicles. Therefore, the MBLD#6 theme of Ogino Co., Ltd. Parts Purchasing real-life situations when serving customers. “Self-Initiated Change and Dramatic Quality Department No.1 Improvement,” was particularly well suited I plan to continue applying the things I to our daily work and we got into the topic learned, which I hope will help me develop seriously. In line with the “My resolution for trusting relationships with customers. change,” that we made in the MBLD session, all members of our division will expand our efforts for further success.

Social & Environmental Report 2006 46 Matching People, Work and Rewards Ensuring Diversity

Career Meetings To foster workplace diversity, in April 2005 Mazda set specific To encourage regular and formal communication between targets for the number of new female recruits, the number of employees and their supervisors, Mazda has introduced female managers and the percentage employment of people quarterly career meetings. with special needs. In FY2005, all these targets were met. The Tobiuo HR Management System is based on the idea Depending on the speed with which these objectives are met in that people will work hard and maximize their potential when the future, we may raise the target levels to encourage ongoing they agree with the roles and responsibilities they have been workplace diversity. given. Career meetings are a way for employees and their supervisors to set individual work goals and review Increasing the Number of Female Employees achievements, as well as to communicate personal ambitions. and Positions for Women Since 1998, Mazda has run the Women’s Counseling Desk and reviewed its treatment of female workers, abolished the The Main Themes of Career Meetings practice of hiring women merely for general-purpose jobs, began employing women for engineering and other technical Development · Assessment of personal ambitions and to what degree they positions, increased the number of mid-career recruits and can be achieved through work promoted a forward-looking approach toward hiring women. · Review of skills and activities that will lead to improvement In FY2005, one of our business performance indexes was to Success promote diversity, which included achieving a target number of · Setting individual work goals new female recruits and number of female managers. Both of · Review of achievements and discussion of challenges that lie ahead these goals were met in 2005. In order to advance these goals and promote a balance between work and personal life, we will continue working to create an environment that makes it easy for men and women to work together. Mazda’s Systems that Support Career Development Number of Female Recruits (unconsolidated) Consultation regarding mental Total Recruits Of which, Women and physical health Specialist organizations Occupational health nurses / Number of recruits Occupational health counselors / 881 111 Occupational in-house physicians (FY2005) Advice regarding HR Department Tobiuo career performance and information development Supervisors E-mail, websites Number of Women in Management Positions (Unconsolidated) Career counselors Career meetings (People) Career Challenge system Career training 60 56 Job postings Employees Group training, Free Agent (Voluntary e-learning 50 Job Transfer System) 43 Day-to-day communication Consultations regarding corporate life 40 32 30 26 Tobiuo community activities 23 20

Personnel Development Committee 10

0 2001 2002 2003 2004 2005 (FY)

Career Challenge System (Job Postings, Free Agent (Voluntary Job Transfer System)) In January 2004, we put in place the Career Challenge system Employing People with Special Needs (job postings, Free Agent (Voluntary Job Transfer System)) to Mazda strives to maintain a stable ratio of employees who have support employee career development. This system enables special needs. As of the end of FY2005, our employment ratio employees to seek additional challenges in new fields or was 1.88%, exceeding the legally stipulated 1.8%. divisions, based on their career experience.

47 Social & Environmental Report 2006 FY2005 Performance Report With Our Employees

Matching People, Work and Rewards Ensuring Diversity Senior Employment childrearing, caring for relatives or carrying out personal Mazda’s mandatory retirement age is 60. From the current business at government offices. fiscal year, the Revised Law Concerning Stabilization of Special Working Arrangements for Employees Involved Employment of Older Persons stipulates a system of with Childcare or Nursing (implemented in 2002) Career Meetings To foster workplace diversity, in April 2005 Mazda set specific continuous employment until 65. In February 1991, Mazda had Staff who are responsible for childrearing or caring for other To encourage regular and formal communication between targets for the number of new female recruits, the number of already put in place a Senior Family system to promote the family members can request special working arrangements that employees and their supervisors, Mazda has introduced female managers and the percentage employment of people continued employment of senior workers. allow them to work shorter or more suitable hours. Special quarterly career meetings. with special needs. In FY2005, all these targets were met. In April 2006, we reviewed this Senior Family system and arrangements for childrearing are valid until the youngest child The Tobiuo HR Management System is based on the idea Depending on the speed with which these objectives are met in implemented the Family of Experts system. Under the previous enters the second grade of primary school. Arrangements that people will work hard and maximize their potential when the future, we may raise the target levels to encourage ongoing system, the scope of employment was limited to technicians concerning care of family members may be in place for as long they agree with the roles and responsibilities they have been workplace diversity. and certain other similar jobs. The new system specifies that as required. In this way, we cooperate with after-school given. Career meetings are a way for employees and their “any employee who satisfies the basic requirements agreed childcare programs for younger primary school students in supervisors to set individual work goals and review Increasing the Number of Female Employees upon by labor and management,” can be included. communities where our facilities are located. In FY2005, 73 achievements, as well as to communicate personal ambitions. and Positions for Women Each year, we increase the number of reemployed senior people took advantage of this program. Since 1998, Mazda has run the Women’s Counseling Desk and citizens. The Family of Experts System is designed to promote Promotion of Planned Use of Paid Leave reviewed its treatment of female workers, abolished the the rehiring of seniors and to facilitate the passing on of their We promote the planned use of paid leave by both employees The Main Themes of Career Meetings practice of hiring women merely for general-purpose jobs, experience, skills and technical expertise to the next generation. and management. During FY2005, members of our union took Development began employing women for engineering and other technical Senior Citizen Employment (unconsolidated) an average of 17 days of leave, which amounts to · Assessment of personal ambitions and to what degree they positions, increased the number of mid-career recruits and approximately 90% of their entitlement. can be achieved through work promoted a forward-looking approach toward hiring women. (People) Other systems to promote a balance between work and personal life · Review of skills and activities that will lead to improvement 400 In FY2005, one of our business performance indexes was to 389 Mazda Mutual Aid Union activities Success promote diversity, which included achieving a target number of · Setting individual work goals new female recruits and number of female managers. Both of 302 Close-up · Review of achievements and discussion of challenges that lie 300 ahead these goals were met in 2005. In order to advance these goals Onsite Daycare Center and promote a balance between work and personal life, we will 188 ‘Mazda Waku Waku-Kids-En’ continue working to create an environment that makes it easy 200 for men and women to work together. 135 In FY2002, Mazda set up an in-house daycare facility, called Mazda’s Systems that Support Career Development 106 100 “Waku Waku-Kids-En,” for employees’ pre-school children. The Number of Female Recruits (unconsolidated) facility provides homemade meals and a special room for children Consultation regarding mental Total Recruits Of which, Women and physical health who do not feel well. In addition to after-school childcare, the Specialist organizations 0 Occupational health nurses / 2001 2002 2003 2004 2005 (FY) facility provides temporary childcare in emergencies. Occupational health counselors / Number of recruits 881 111 Occupational in-house physicians (FY2005) Advice regarding HR Department Tobiuo career performance and information Promoting a Balance between Work and Personal Life development Supervisors E-mail, websites Number of Women in Management Positions (Unconsolidated) Career counselors Mazda has put in place a number of systems to achieve one of Career meetings (People) the goals of the Tobiuo Human Resources System; promoting Career Challenge system Career training 60 Job postings Employees Group training, 56 a balance between work and personal life. Free Agent (Voluntary e-learning 50 Super-Flextime (implemented in 2000) Job Transfer System) 43 Day-to-day communication Nearly all our workplaces have adopted a flextime system for Consultations regarding corporate life 40 32 administrative and technical staff that has no fixed office hours. 30 26 This flexibility enables each employee to plan and manage his 23 Tobiuo community activities or her own time. 20 Nursing Leave (implemented in 2003) Personnel Development Committee 10 We have a special system that allows employees to take leave Personal Message without using their annual paid vacation if a family member is 0 2001 2002 2003 2004 2005 (FY) injured or ill. This system applies not only when the party who is Proximity to the office and links with injured or sick is a pre-school child of an employee, but for any the hospital provide peace of mind Career Challenge System (Job Postings, member of the family who lives in the employee’s home. Up to I started using Waku Waku-Kids-En last Free Agent (Voluntary Job Transfer System)) 10 days per year of leave may be taken in this way, at the rate September, when my child turned 1 year In January 2004, we put in place the Career Challenge system Employing People with Special Needs of 70% of the paid leave wage. In FY2005, 35 people took old. It’s nearby, so if something happens (job postings, Free Agent (Voluntary Job Transfer System)) to Mazda strives to maintain a stable ratio of employees who have advantage of this system. I can drop in easily, and the facility has Wataru support employee career development. This system enables special needs. As of the end of FY2005, our employment ratio Half-Day Paid Leave System (implemented in 2001) close links with the Mazda Hospital, Ohnishi which is reassuring. If I have a second Body Production employees to seek additional challenges in new fields or was 1.88%, exceeding the legally stipulated 1.8%. Employees are allowed to take a paid half-day of leave. This Engineering divisions, based on their career experience. option helps employees balance their work with such duties as child, I will definitely use the facility for her Department or him, as well.

47 Social & Environmental Report 2006 Social & Environmental Report 2006 48 A Safe Workplace Environment Safety and Health for Workers After suffering a serious accident in 2004, Mazda formulated its Safety and Health Creed, created a Safety Resolution for employees to declare, initiated education on attitude change, Mazda promotes activities to develop human resources, conducted awareness activities and improved equipment safety. workplaces, and systems based on the Safety and Health Creed. As a result, in FY2005 we experienced no serious accidents, and downtime due to accidents also decreased. Mazda has also established its own environmental standards and is working Safety and Health Creed hard to reduce levels of hazardous substances (dust and “Safety & Health” is fundamental for all workers and is the organic solvents), noise and heat. Mazda is also working actively most important thing. on the application of ergonomics to reduce the strain on “People” themselves are our treasure! To protect our treasure, we must never compromise. employees. Through these activities we are creating people-friendly workplaces. In the future, we intend to provide various types of support to General Safety and Health Committee ensure that safety and health management at all companies in Mazda has established the General Safety and Health the group is at least as effective as at Mazda itself. Committee, whose members include management executives Education and training concerning workplace safety and health (executives responsible for health and safety, and each division’s general managers) and labor representatives (Mazda Lost Time Work Incident Ratio* Workers’ Union leaders). In line with official agreements, committee members meet to discuss and decide each year’s (%) 0.99 action plan and priority measures concerning safety and health. 1.0 Formal agreements with the Mazda Workers’ Union on 0.76 safety and health 0.8 0.73 0.68 0.66 0.65 0.61 Objectives in FY2006 0.6 0.43 1. Implement a safety and health management system to 0.33 promote the development of accident free workplace 0.4 0.31 through removing all risks. 0.23 2. Foster a working atmosphere in which everyone fully follows 0.12 0.2 0.23 safety rules. 0.08 0.06 3. Promote lifestyle improvement and mental health measures. 0 4. Promote improvement of the working environment and 2001 2002 2003 2004 2005 (FY) working methods to create a comfortable workplace. Mazda Affiliated companies Toyukai (Supplier organization) 5. Aim to raise the level of safety and health management throughout the whole Mazda group. Frequency of industrial accidents, measured in number of accidents per * million person-hours worked.

Goals of safety and health activities Mazda Safety and Health Management System Safety: Aiming for a safe and accident-free workplace through increasing safety features in equipment FY2005 saw the introduction of the third All-Mazda Zero and eliminating careless behavior. Campaign 3-Year Plan. We also introduced the Mazda Health Hygiene: Aiming for the creation of a comfortable workplace and Safety Management System to help prevent accidents. through improvements in working environment and operations Specifically, to further process-oriented innovation we are Health: Aiming for reductions in sick leave and training personnel to ensure the implementation of the annual improvements in health through employee lifestyle plan-do-check-act (PDCA) plan. We prepared operation reviews and mental health management. Accident standards and a procedure manual, and trained risk prevention: Aiming for the prevention of accidents and fires management staff to conduct thorough risk assessments. through comprehensive risk management. In FY2006, we plan to train internal inspectors and conduct Transportation: Aiming for improvement in traffic safety awareness among all employees so they become role models, checks to encourage cooperation between divisions and encouraging safe driving attitudes throughout promote self-sustained activities. society. Aims of the Mazda Safety and Health Management System

49 Social & Environmental Report 2006 FY2005 Performance Report With Our Employees

Health Maintenance and Improvement As part of its efforts to raise health levels throughout the Superb Labor–Management Relations company, Mazda is promoting lifestyle improvements and strengthening mental health measures. These initiatives include lowering the rate of smoking, as well as encouraging walking Mazda has a standing labor agreement with the Mazda Workers’ and promoting mental health. Union. Through collective bargaining and the In 2004, aiming at reducing the smoker ratio to 27%, we Labor-Management Council, we cooperate on issues including completed measures to separate all smoking areas in every employment stability, the maintenance and improvement of office. Also, in September 2005 we removed all cigarette working conditions, and health and safety. Regardless of the vending machines from company premises. These measures business environment, by communicating closely we are working have helped us reduce the smoking rate. In 2001, smokers to foster strong relationships of mutual understanding and trust. accounted for 51.4% of employees. In 2005, this number had dropped to 40.1%. The Mazda Warm Heart Plan sums up our measures to promote mental health. This plan, which includes specific programs for shop floor units, improvements in self-care and a healthier workplace, aims to create a more comfortable working environment. To increase communication in the workplace, we have launched a companywide campaign called, “Let’s present The Labor-Management Council ‘Verbal Bouquet.’” In keeping with the major objectives outlined above, we The Mazda 21st Century Labor–Management Joint Declaration implement regular health checks. Individual guidance is also On September 30, 2001, we adopted the Mazda 21st Century provided, as warranted by checkup results. Labor–Management Joint Declaration, which states that within Details on measures to curb smoking and promote walking a climate of increasing global competition and faced with social Results of health checks and mental health care in FY2005 demand for ever higher safety and environmental standards, Mazda is committed to achieving its corporate vision and fulfilling its role as a member of society, through respecting all people and understanding that each and every one of them is key to the changes required to become a ‘strong and vibrant group organization.’ Details of the Mazda 21st Century Labor–Management Joint Declaration

The Mazda 21st Century Labor–Management Joint Declaration 21st Century Labor–Management Vision As partners, the company and the Union must “excite and delight our customers through the best automotive products and services,” acting cooperatively and in harmony for Mazda to become a company with a distinctive presence, competitiveness and social value. Labor-Management Mutual Commitment 1. Emphasizing labor-management relations to work toward Mazda Walking and Hiking Event prosperity 2. Executing roles of labor-management for change Preventing Ill-health and Accidents Due to Overwork 3. Making efforts to establish attractive and advanced labor In April 2003, Mazda initiated a system where occupational conditions in-house physicians conduct checkups and, and occupational 4. Maximum support for achieving employee success health nurses offer guidance to prevent potential sickness resulting 5. Deepening and enhancing communications with society from overwork. Employees must take part in this system if they meet either of the two criteria outlined below. (A) An employee works 100 hours or more of overtime in a Adjusting Employment month or if overtime during the past two to six months When adjusting employment in ways that could affect the averages 80 hours or more. working conditions of union members, Mazda discusses the (B) An employee works more than 45 hours per week and is situation beforehand, then deliberates and makes decisions in recommended by the in-house doctor. conjunction with the labor union. No such adjustments were In FY2005, 377 people received occupational health guidance, made in FY2005, however. and 133 submitted to checkups by the in-house doctor.

Social & Environmental Report 2006 50 FY2005 Performance Report With Communities and Societies

As a corporate citizen, Mazda strives to pursue community services and communications in a wide range of fields, in addition to continuing to carry out social and international services spanning science, education, culture and environmental protection.

The Mazda Group’s Policies Regarding Activities contributing to the Community

Based on the policies listed below, Mazda is rolling out a series of regional contribution activities programs not only in the area of its head office and in Hofu, but also in Tokyo, Yokohama and Osaka, as well as other places where it has business bases.

Basic Philosophy for Activities Activity Policies As a good corporate citizen, Mazda seeks to bring vitality to the Activities attuned to local needs local economy and industry through corporate activities, and to Emphasis on, and support for, volunteer activities by employees work for cooperation and mutual growth with the region and to Alliances with other companies in the Mazda group contribute to the creation of local prosperity. Expansion of opportunities for interaction with the local community Emphasis on continuity

The Mazda Community Contributions Tree

Science and education Culture and the arts Scientific and technological research support Lecture meetings (Mazda Foundation) (Mazda Foundation) Support for the Hiroshima Symphony Orchestra Youth For Understanding (YFU) Program (Mazda Support for the International Animation Festival Foundation) University lectures (Mazda Foundation) Loaning of lecturers to Junior and Senior High Schools, etc. International exchange Environmental protection and disaster measures The Mazda–YFU Scholarship Program Community clean-ups/cleaning area around Investment and personnel placement in company facilities international exchange organizations Participation in government-organized clean-up Scholarship support for overseas students campaigns Hosting homestay candidates through volunteer Environmental protection campaigns programs Dispatching in-house fire engines/ambulances to the community for assistance where necessary Social welfare / Medical care Regional development Donation of special needs vehicles (Mazda Worker's Union) Investment/personnel placement in community economics foundations Wheelchair donation campaign Cooperation and contributions to technology Opening up the Mazda Hospital to the local exhibitions community Publication of patents and technical support The ‘Love Hofu Campaign’ (in Hofu) Sports Support for youth and civic activities (Mazda Sponsorship of Hiroshima Toyo Carp Baseball Foundation), etc. Team Sponsorship and personnel placement for Regional exchange Sanfrecce Hiroshima Soccer Team Organization and participation in the Hiroshima Hosting of Mazda Community Ekiden (long Flower Festival distance relay race) Operation of Mazda Museum, open to the public Cooperation with Hiroshima International Peace Marathon, and prefectural Ekiden Race Publication of ‘Letter from Mazda’ Hosting of Mazda Invitational Youth Soccer Mazda group Competition (in Hofu), etc.

Mazda Volunteer Center Mazda Specialist Bank

Local community

51 Social & Environmental Report 2006 Principal communication aims : Support for science, education, culture and arts/Support for environmental protection and regional disaster prevention/ Stimulation of international exchange/Promotion of regional advancement and exchange/ Support for social welfare and medical infrastructure/Support for sports Principal channels of communication : Community Relations Gr., General Affairs Dept./ General Affairs Dept. at each facility/Mazda Foundation/Mazda Museum

Mazda’s Community Services Committee In its social contribution activities, Mazda places particular we operate. emphasis on actively and enduringly pursuing activities tailored Based on this policy, in 1993 we established the Mazda to the needs of local communities. This arises from the belief Community Services Committee, comprising representatives that local communities are the foundation for the existence of from all the group’s companies and internal departments and the Mazda group’s operations; we have an important role as a presided over by the head of the Corporate Affairs Division. responsible corporate citizen to conduct activities that bring Mazda’s community services are propelled by this committee pleasure to local citizens, empathize with local sentiment and and a managing body of delegates. enable us to proceed in accord with the communities in which

Mazda Community Services Committee Organization

Chairperson Committee office All branches and facilities (General Manager, Corporate General Affairs Dept., Corporate Affairs Div. Tokyo Head Office Affairs Division) Osaka Branch Hofu Plant Deputy Chairperson Community Services Promotion Committee Miyoshi Proving Ground Mazda R&D Center Yokohama General Manager, General Affair Dept. All divisions Vice President, Mazda Workers' Union Affiliates Mazda Workers’ Union Employee Relations Dept., Personnel OB associations Committee members & Human Development Div. Employee Relations Dept, Personnel & Human Development Div. Mazda Workers’ Union Hiroshima Plant R & D Administration Innovation Dept. Affiliated ompaniesc Toyukai Affiliated Corporations Toyukai members

Volunteer Activities

Volunteer Visits Cleanup Volunteers Volunteers visit local social welfare homes and homes for the In addition to cleaning up areas surrounding our plants and elderly every year in June and July, and enjoy spending time offices nationwide, company volunteers also work on local with residents. This has been going on for around 20 years. In community cleanup campaigns, in order to promote local 2005, a total of 169 volunteers visited six facilities, including the conservation as members of the community. Nishi Shiwa Farm (in Higashi Hiroshima City) and Senogawa During FY2005, 2,929 employees participated in such Gakuen (in Hiroshima City). initiatives.

Sweet potato planting at Nishi Shiwa Farm Otagawa Riverbank Clean Campaign

Social & Environmental Report 2006 52 Collecting Postcards & Telephone Cards towards Wheelchair Donations Social Activities Mazda group employees are collecting unsent and other unwanted postcards and used or unused telephone cards. These are converted to cash, which is added to funds from a Participation in Local Events charity bingo event at the Flower Festival, and used as donations We participate each year in the Hiroshima Flower Festival (near to purchase wheelchairs for the Hiroshima prefecture and Hofu the head office), the Hofu Tenmangu ‘Tenjin Matsuri’ Festival city social welfare associations. The campaign, which has been (near the Hofu Plant) and the Miyoshi Kinsai Festival (near the running since 1996, has supplied 165 wheelchairs to date. Miyoshi Office), among other festivals. This involvement helps us to deepen our commitment to interface with the local Mazda Volunteer Center Activities communities. The Mazda Volunteer Center was established in 1996. Mazda and Mazda group employees who wish to become involved in Participation in the Love Hofu Campaign volunteer activities register with the center, and then are able to This program grew from an idea of cooperating with local respond to requests from local groups for volunteer assistance. businesses and stores to stimulate and develop Hofu City. During FY2005, target activities spanned community cleanup Under the slogan “Companies are citizens also,” 35 firms with campaigns and other environmental enhancement initiatives, factories in the city commenced activities from April 1993 with support for disaster relief, assistance with social welfare events, the objective of contributing to the revitalization of the city. We care assistance, support for international exchange programs maintain the campaign office in the General Affairs Dept. at the such as homestays and help with regional festivals and other Hofu Plant. events. A total of 105 employees participated in 34 of these voluntary activities. Support for Sports and Cultural Activities We provide support for a broad range of sporting and cultural Mazda Specialist Bank Activities activities, from local to professional levels, such as by hosting When local communities organize events, they can find the Mazda Community Ekiden (long-distance relay race), themselves with insufficient manpower. The Mazda Specialist sponsoring the Hiroshima Toyo Carp baseball team and Bank was established in 1994 to fill this gap and enable Mazda Sanfrecce Hiroshima soccer team, and supporting the Hiroshima to make contributions to local communities. Employees of Symphony Orchestra. Mazda also jointly hosts the Mazda Mazda and its group companies with specialist knowledge, Invitational Youth Soccer Competition in the Hofu Plant district. abilities and skills, as well as talents or interests developed over the years, are registered at the bank and serve as a resource to meet requests from local communities. Plant Tours During FY2005, the bank dispatched volunteers to provide backup for 103 activities, including lectures, sports and recreation instruction and a host of other programs and events. As a forum for communicating with local communities and an Progress of Mazda Specialist Bank activities opportunity for schools’ social studies classes, we carry out plant tours at the Hiroshima head office, Hofu Plant and the Miyoshi office. During FY2005, approximately 79,000 people visited these 3 facilities.

Mazda Community Ekiden (long-distance relay race)

53 Social & Environmental Report 2006 FY2005 Performance Report With Communities and Societies

Mazda Museum Activities Overseas Social Services Activities

Active in Both Education through School Trips Mazda3 Donation to a Thai Volunteer Group and Community Communication Mazda Sales (Thailand) Co., Ltd. has donated a Mazda3 to The Mazda Museum, established in May 1994, underwent Chiang Mai-Hiroshima Peer Group. This organization provides complete renovation in February 2005. From its founding support for HIV sufferers through Japanese volunteers currently through to the end of March 2006, the facility has hosted in service in Ban Santa Cruz in Chiang Mai. 819,324 visitors. The donated vehicle will be used for transporting volunteer The Mazda museum is the only automobile museum in the staff on visits to hospitals and other facilities. Chugoku and Shikoku regions of Japan, and we will continue to utilize it as a hub for social studies classes and local exchange activities. During FY2005, principal activities included social science studies support training for elementary school teachers, mechanical building workshops and shipping observation events. The Mazda Museum

Volunteer group staff, after the Mazda3 presentation ceremony

Preservation of the Natural Environment in South Africa The Mazda Wildlife Fund, in liaison with NGOs including the Wildlife & Environment Society and the Endangered Wildlife Trust, provides approximately 1.5 million rand in aid annually for protection of rivers, forests, and wild animals, environmental education, technological training, regional development and Activities in the Yokohama Area creation of employment in South Africa. These highly acclaimed activities gained the Stars of Mazda R&D Center Yokohama welcomes visitors through Africa Award from the exchange events such as technology exhibitions. It also American Chamber of performs social services activities that include holding charity Commerce in November 2004. flea markets in association with the Mazda Vehicles Owners’ Club and NPOs, donating to the Make-A-Wish Foundation (an organization that grants the wishes of children who suffer from incurable diseases), and organizing Santa Claus visits to a special needs facility. Contributing to Society in Italy Mazda Motor Italia S.p.A., our Rome-based sales facility, Diverse Donations and Support Activities provides support for the nonprofit organization, Peter Pan, in its work with sick children. During 2005, the company donated Mazda cars to 7 organizations serving this cause. An integral part of our corporate operations is to vitalize In 2002, Mazda Motor Italia also regional economies and industry through activities that became an official partner of the contribute to a range of fields, such as science and education, Associazione Italiana Sclerosi Multipla culture and the arts, international exchange and the promotion (AISM), an NPO that has been supporting of sports. research into multiple sclerosis for more During FY2005, we donated approximately 150 million yen to than 30 years. the Mazda Foundation, local societies and other recipients.

Social & Environmental Report 2006 54 Mazda Foundation Activities Mazda Foundation USA Activities

Promotion of Science and Technology, The Foundation was established in 1990 as one way of and Young People Development contributing to American society as a good corporate citizen. The Mazda Foundation was founded in 1984 to promote The Foundation offers support for educational activities science and technology and foster youth development (support with tuition costs, literacy programs and outdoor programs. The foundation aims to contribute to the creation of activities). Since FY1998, the foundation has been engaged in a society where global citizens share their prosperity and live an an environmental conservation program supported by abundant and fulfilling life. During FY2005, activities spanned volunteers. supporting research, sponsoring community activities, dispatching external Fostering Science and Technology Promotion lecturers to universities and Mazda Foundation (USA) is a patron of the New Detroit hosting lectures. As of Science Center, which invites local students and teachers to March 31, 2006, the Mazda extracurricular lectures. Foundation had supported 1,171 projects through The Mazda–YFU Scholarship Program donations totaling 1,071.31 As part of the international cultural exchange activities of the million yen. Ms. Tomiko Miyao giving a lecture Mazda Foundation (USA), since 1984 the Mazda–YFU Mazda Foundation Business Report Scholarship Program has been jointly organized with Youth For http://mzaidan.mazda.co.jp/ Understanding (YFU), a U.S.-based international exchange Close-up organization for high-school students. Encouraging Children Back into Science During the 22 years that the program has been in operation, more than 200 US high-school students have been able to The Mazda Foundation runs the ‘Science is Fun’ project in experience cultural differences through homestays in Japan. A conjunction with Hiroshima University. Its aim is to foster a highlight of their stay is a visit to the Mazda head office, which passion for science among children. Targeting elementary to includes meeting Mazda’s representative director and president high-school students, this initiative aims to bridge the gap and an explanation of the automobile manufacturing industry between young people and the sciences. through the plant tour and other activities.

American high-school students at the Mazda Museum tour

Personal Message

Science seminars for junior high Support for Nature Conservation in the United States and high school students Mazda Foundation (USA) works with the Student Conservation Projects carried out during FY2005 Association to place conservation interns in state and national included the ‘Junior Science Classes—the parks to support the Save Our American Resource program. amazing paramecium bursaria protazoa’ Funding for this campaign, which spans all 50 states, helps to for junior high school students and Kohei promote the protection of nature’s resources across the ‘Science Classes—the world of relativity Yamamoto United States. theory’ for high-school students. Assistant Professor of Hiroshima University http://mazdafoundation.org/

55 Social & Environmental Report 2006 FY2005 Performance Report With Communities and Societies

Through donations of financial aid and Mazda cars over three Mazda Foundation New Zealand Activities years, the foundation is supporting the Australian Integrated Mental Health Initiative, run by Queensland University.

Mazda Foundation New Zealand was founded in November 2005 with the core objective of fostering New Zealand’s environment, culture, arts and education. The foundation started to conduct activities in 2006.

Support for the Protection of Native Birds Mazda Foundation (New Zealand) donated NZ$2,500 to the Whangarei Native Bird Recovery Centre. This facility provides protection for 1,300 injured wild birds each year and its hatching facilities have produced 120 kiwis, the national bird of New Zealand, during the past 12 years.

Mazda scholarship winners at the Mental Health First Aid Instructor Course http://www.mazda.com.au/

Mazda Foundation Colombia Activities

Since its establishment in 1990, Mazda Foundation Colombia has promoted educational and cultural activities throughout the country. Examples include providing grants for postgraduate education in physics, mathematics and classical music, Protection of wild birds promoting research projects among students with emphasis in http://www.mazdafoundation.org.nz/ Classical Medieval, and the contest. In addition, the foundation has hosted 144 classical concerts over 15 years, featuring guest performers from overseas. These Mazda Foundation Australia Activities have reached a total cumulated audience of more than 120,000 people.

Mazda Foundation Australia was established in 1990 to contribute to a richer life for the peoples of Australia, through supporting youth education, promoting science and technology and protecting the natural environment. The organization collects donations from Mazda Australia Pty Ltd, Mazda dealerships and from the regions in which it operates to provide support for a range of projects.

Australian Integrated Mental Health Initiative During FY2005, Mazda Foundation Australia donated A$50,000 to the University of Queensland’s Faculty of Health Sciences. This grant is earmarked to support a pilot program for mental hygiene services carried out in rural areas. http://www.mimazda.com/

Social & Environmental Report 2006 56 FY2005 Performance Report FY2005 Performance Report Mazda Global Environmental Charter

It has been 13 years since we established the Mazda Global Environmental Charter. It has now been revised to bring it up to date with the current status of our activities. The recent amendments express the unified stance of the Mazda Group with regard to global environmental conservation.

Group-wide Global Environmental Measures

On April 1, 2005, we reviewed the Mazda Global Environmental Charter, which defines our basic environmental policy from the viewpoint of corporate social responsibility (CSR). Since the number of joint activities, such as vehicle recycling, that Mazda conducts with other companies within the group has grown significantly, the scope of the charter was expanded. This revision, the first in the 13 years since its inauguration in 1992, makes it an accurate account of our current activities.

Environmental Principles “Mazda Group aims to promote environmental protection and contribute to a better society, while maintaining harmony with nature in our business activities all over the world.”

Basic Policy With the Global Environment We will contribute to society by creating environmentally friendly technologies and products. We will use the Earth’s resources and energy sparingly, and never overlook environmental considerations when conducting our business. We will play our part in improving the environment, hand in hand with local communities and society at large. Guidelines for Action Mazda Global Environmental Charter 58 1. Creation of Environmentally Sound Technologies and Products “Mazda Green Plan 2010” Environmental Mid-Term Plan 59 We are committed to the challenge of creating clean technologies, including ways to achieve cleaner exhaust emissions and reductions in CO2, and the development of clean-energy vehicles. Overview of Mazda’s Corporate Activities and Impact 61 We will encourage the creation of products that are environmentally friendly throughout their lifespan, on the Environment / LCA Measures from the planning and development stages through to manufacturing, use, and recycling/disposal. Environmental Management 2. Corporate Activities for Conserving Resources and Energy Environmental Management System / Environmental Auditing / 63 In order to conserve the Earth’s limited resources, we will actively promote saving resources and recycling activities. Environmental Incidents and Complaints and Compliance with Environmental Laws / Environmental Risk Management / Environmental Education We will strive to diversify the efficient use of energy. Environmental Accounting 65 We will promote the appropriate disposal and recycling of end-of-life vehicles*. Product Development and Research and Development 3. Corporate Activities in Pursuit of a Clean Environment Cleaner Exhaust Emissions / Improved Fuel Economy / Vehicle Weight reduction / 67 We will not merely comply with environmental laws and regulations, but will also impose Development of alternative fuel vehicles / Raising New Car Recyclability / voluntary controls for higher standards and implement self-regulated control. Reducing Vehicle Noise / Reducing the Use of Hazardous Materials In our pursuit of a clean environment, we will promote the development of new technologies Reducing the Environmental Impact of Production and the introduction of new systems which contribute to a cleaner environment. Energy Conservation (Global Warming Prevention) / Reducing Waste / Reducing Chemical Substance Emissions / Effective Use of Water and 77 4. Working with Others in Our Business Activities to Create a Better Environment Prevention of Wastewater Contamination / Eliminating Air Pollution / We will actively provide our employees with education and information about environmental Eliminating Sensory Pollution / Other Environmental Measures / Initiatives to Preserve the Natural Environment / Promoting Green Procurement protection to enhance their awareness of the global environment. We will work close cooperation each other to achieve better environmental protection. Reducing the Environmental Impact in Logistics Operations Curtailing CO2 Emissions Caused by Logistics Activities / 81 5. Creating a Better Environment in Cooperation with Local Communities and Society Reduction in Packaging and Wrapping Materials We will work actively to understand and appreciate society’s requirements for the environment Recycling End-of-life Vehicles and reflect them in our business activities. Promotion of Recycling based on the End-of-life Vehicle Recycling Law 83 We will disclose and publicize environment-related technologies, systems and information. Investigation and Research into ELV Recycling Technologies We will not only conduct our own environmental activities, but will also make a collaborative effort Efforts in Offices and at Dealerships 85 in other social activities for the conservation of the environment with society. (established 1992; revised April 2005) Environmental Communications 86 * revised November 2005

57 Social & Environmental Report 2006 Social & Environmental Report 2006 58 FY2005 Performance Report FY2005 Performance Report Mazda Global Environmental Charter

It has been 13 years since we established the Mazda Global Environmental Charter. It has now been revised to bring it up to date with the current status of our activities. The recent amendments express the unified stance of the Mazda Group with regard to global environmental conservation.

Group-wide Global Environmental Measures

On April 1, 2005, we reviewed the Mazda Global Environmental Charter, which defines our basic environmental policy from the viewpoint of corporate social responsibility (CSR). Since the number of joint activities, such as vehicle recycling, that Mazda conducts with other companies within the group has grown significantly, the scope of the charter was expanded. This revision, the first in the 13 years since its inauguration in 1992, makes it an accurate account of our current activities.

Environmental Principles “Mazda Group aims to promote environmental protection and contribute to a better society, while maintaining harmony with nature in our business activities all over the world.”

Basic Policy With the Global Environment We will contribute to society by creating environmentally friendly technologies and products. We will use the Earth’s resources and energy sparingly, and never overlook environmental considerations when conducting our business. We will play our part in improving the environment, hand in hand with local communities and society at large. Guidelines for Action Mazda Global Environmental Charter 58 1. Creation of Environmentally Sound Technologies and Products “Mazda Green Plan 2010” Environmental Mid-Term Plan 59 We are committed to the challenge of creating clean technologies, including ways to achieve cleaner exhaust emissions and reductions in CO2, and the development of clean-energy vehicles. Overview of Mazda’s Corporate Activities and Impact 61 We will encourage the creation of products that are environmentally friendly throughout their lifespan, on the Environment / LCA Measures from the planning and development stages through to manufacturing, use, and recycling/disposal. Environmental Management 2. Corporate Activities for Conserving Resources and Energy Environmental Management System / Environmental Auditing / 63 In order to conserve the Earth’s limited resources, we will actively promote saving resources and recycling activities. Environmental Incidents and Complaints and Compliance with Environmental Laws / Environmental Risk Management / Environmental Education We will strive to diversify the efficient use of energy. Environmental Accounting 65 We will promote the appropriate disposal and recycling of end-of-life vehicles*. Product Development and Research and Development 3. Corporate Activities in Pursuit of a Clean Environment Cleaner Exhaust Emissions / Improved Fuel Economy / Vehicle Weight reduction / 67 We will not merely comply with environmental laws and regulations, but will also impose Development of alternative fuel vehicles / Raising New Car Recyclability / voluntary controls for higher standards and implement self-regulated control. Reducing Vehicle Noise / Reducing the Use of Hazardous Materials In our pursuit of a clean environment, we will promote the development of new technologies Reducing the Environmental Impact of Production and the introduction of new systems which contribute to a cleaner environment. Energy Conservation (Global Warming Prevention) / Reducing Waste / Reducing Chemical Substance Emissions / Effective Use of Water and 77 4. Working with Others in Our Business Activities to Create a Better Environment Prevention of Wastewater Contamination / Eliminating Air Pollution / We will actively provide our employees with education and information about environmental Eliminating Sensory Pollution / Other Environmental Measures / Initiatives to Preserve the Natural Environment / Promoting Green Procurement protection to enhance their awareness of the global environment. We will work close cooperation each other to achieve better environmental protection. Reducing the Environmental Impact in Logistics Operations Curtailing CO2 Emissions Caused by Logistics Activities / 81 5. Creating a Better Environment in Cooperation with Local Communities and Society Reduction in Packaging and Wrapping Materials We will work actively to understand and appreciate society’s requirements for the environment Recycling End-of-life Vehicles and reflect them in our business activities. Promotion of Recycling based on the End-of-life Vehicle Recycling Law 83 We will disclose and publicize environment-related technologies, systems and information. Investigation and Research into ELV Recycling Technologies We will not only conduct our own environmental activities, but will also make a collaborative effort Efforts in Offices and at Dealerships 85 in other social activities for the conservation of the environment with society. (established 1992; revised April 2005) Environmental Communications 86 * revised November 2005

57 Social & Environmental Report 2006 Social & Environmental Report 2006 58 FY2005 Performance Report “Mazda Green Plan 2010” Environmental Mid-Term Plan

The company launched the Mazda Green Plan 2010, its environmental mid-term plan, during 2006 to advance its Environmental Action Promotion Plan that aims to reduce the environmental impact in various facets of its corporate activities. This plan clarifies target categories and objectives and paves the way to attaining these goals.

FY2010 targets FY2005 targets FY2005 results FY2006 targets FY2010 targets FY2005 targets FY2005 performance FY2006 targets 1. Creation of environmentally sound technologies and products 2. Corporate activities to conserving resources and energy Scope/Initiative 1: Cleaner exhaust emissions Scope/Initiative 9: Reduction of waste substances · In Japan, the SU-LEV standard was · Reduce direct landfill waste to 1% or less achieved for the Mazda MPV, Premacy (680 tons/year) of FY1990’s figure. · Direct landfill waste was reduced to 0.5% (Mazda5), Demio (), Atenza Eradicate all landfill waste from domestic Reduce all landfill waste to 0.4% or less Japan—Achieve the SU-LEV ( ) Gain SU-LEV/U-LEV approval for 90% of its production operations. · Stop incineration and emit no incinerated (356 tons/year) of FY1990’s figure. (300 tons/year) of FY1990’s figure standard in most of its passenger vehicles. passenger cars by the end of 2005. (Mazda6), Verisa and Axela (Mazda3). Japan—Expand launch of SU-LEVs ash by waste reduction and promotion of · Stopped the incinerators as planned. · Mazda achieved the standard for 92.3% of ( ). recycling. its passenger vehicles (75.1% for SU-LEV and 17.2% for U-LEV). Reduce the consumption of packaging and Reduce the consumption of packaging and Reduced the consumption of packaging Reduce the consumption of packaging and wrapping materials by 30% from the wrapping materials by 19.1% from the and wrapping materials by 20.5% from the wrapping materials by 23.3% from the United States—Promote introduction of Expand the number of vehicles conforming The Tier2/LEV2 regulations were met for All models conformed to Tier2/LEV2 FY1999 level. FY1999 level. FY1999 level. FY1999. low-emission vehicles that meet Tier2/LEV2 to Tier2/LEV2 regulations. most vehicles. regulations. regulations. Scope/Initiative 10: Prevention of global warming Europe—Develop and launch Introduce clean diesel passenger vehicles DPF engine models were introduced for the Promote development of diesel vehicles Cut domestic production operations’ CO Cut domestic production operations’ CO2 Achieved 24.2% CO2 emissions cut Cut domestic production operations’ CO2 next-generation clean diesel vehicles. equipped with diesel particulate filters (DPF) Mazda3, Mazda5 and Mazda6. with enhanced clean functions. 2 exceeding Euro4 regulations. emissions by 10% compared to FY1990. emissions by 5% compared to FY1990. compared to FY1990. emissions by 8% compared to FY1990.

Cut logistics operations’ CO2 emissions by Cut logistics operations’ CO2 emissions by Achieved 12% CO2 emissions cut from Cut logistics operations’ CO2 emissions by Scope/Initiative 2: Improved fuel economy 15% compared to FY1999. 11% compared to FY1999. logistics operations compared to FY1999. 14% compared to FY1999. Japan—Continue to meet the fuel efficiency standards for 2010 for all weight classes of Achieve the 2010 fuel efficiency standards The 2010 fuel efficiency standards were Achieve the 2010 fuel efficiency standards Scope/Initiative 11: Vehicle recycling promotion passenger vehicles, and promote further for all weight classes of passenger vehicles. achieved for all passenger vehicles except for all weight classes of passenger vehicles. improvements in fuel economy for the for the 1.5-ton passenger vehicle class. · Achieve 2015 regulation values a head of Promote the enhancement of ASR An ASR recycling ratio of 63% and an Promote further enhancements of the ASR Japanese market. time. recycling ratio (the effective recycling ratio effective total vehicle recycling ratio of 94% recycling ratio (actual recycle rate for total · ASR recycling ratio: 70%; Total vehicle for total vehicles). were achieved. vehicle). United States—Continue to meet the Corporate Achieve CAFE regulations (passenger cars: For both passenger cars and commercial Continue to meet CAFE fuel economy recycling ratio: 95% Average Fuel Economy (CAFE) regulations, which 27.5 mpg; commercial vehicles: 21.0 mpg). vehicles, CAFE fuel economy standards standards. are expected to become stricter in the future. were achieved. Collect more waste bumpers from Mazda Collect 52,000 or more pieces. Collected 52,476 pieces. Collect 60,000 pieces or more. Corporate average CO2 emissions were dealerships in Japan. Europe—Promote reduction of the Reduce corporate average CO2 generation Reduce corporate average CO2 emissions corporate average CO emissions. to below FY2004 values. reduced by 4.6 g/km from the FY2004 level to below FY2005 values. 2 (internal calculation). Scope/Initiative 3: Vehicle weight reduction Plans to reduce vehicle weight were Achieve Mazda’s target vehicle weight. Promote vehicle weight reduction. pursued, such as installing aluminum Further promote vehicle weight reduction. bonnets and trunk lids on the Mazda MX-5. 3. Corporate activities in pursuit of a clean environment Scope/Initiative 4: Vehicle Noise reduction Scope/Initiative 12: Reduce VOC emissions Meet Mazda’s voluntary standards for noise Meet Mazda’s voluntary standards for noise The vehicle noise reduction level for all Continue to meet the voluntary standards Reduce VOC emissions to 30 g/m2 of Reduce VOC emissions to 35 g/m2 of VOC emissions were reduced to 34.3 g/m2 VOC emissions were reduced to 34.0 g/m2 reduction, which are stricter than the latest reduction, which are stricter than the latest vehicles met Mazda’s voluntary standard coated surfaces. coated surfaces. of coated surfaces. of coated surfaces. noise regulations. noise regulations. figures. for all vehicles. Scope/Initiative 5: Development of alternative fuel vehicles · Mazda commenced leasing of the world’s first hydrogen rotary engine cars, the Mazda RX-8 Develop and introduce more vehicles Launch hydrogen rotary engine vehicles on Hydrogen RE, and delivered one vehicle each Promote Development of hydrogen rotary equipped with the hydrogen rotary engine. the market. to two energy-related companies. engine vehicles. 4. Working with others in our business activities to create a better environment · The Premacy Hydrogen RE Hybrid was exhibited at the Tokyo Motor Show (2005). Scope/Initiative 13: Promotion of cooperative activities with suppliers Ten Tribute Hybrids were donated to the Promote development of hybrid vehicles. Launch the Tribute Hybrid into the market. Orange County Fire Authority in California, Promote development of hybrid vehicles. · Encourage major suppliers to construct in the United States. Promote the creation of environmental Encourage major suppliers to gain Achieved ISO14001 certification in 97% of environmental management systems Promote development of alternative fuel Launch vehicles compatible with B5 fuel. management systems (EMSs) at suppliers; ISO14001 approval (target: 97%). major suppliers. (target 100%). technologies for biomass fuels and (B5 is a blend of 5% biomass fuel and 95% Technology that enables use of B5 was Promote development of alternative fuel Maintain and improve EMSs for suppliers. · Expand these efforts to include local synthetic fuels petroleum diesel fuel.) introduced in Europe. technologies. secondary suppliers. Scope/Initiative 6: Reduce the use of environmental substances of concern Scope/Initiative 14: Promotion of environmental protection activities by sales companies · Add a provision for compliance with the Reduce the number of parts which Use of hexavalent chromium in some parts Hexavalent chromium: zero use by the end was eliminated through development of a zero use by the end of 2006. most recent environmental laws to Reflection of compliance with latest of 2006. contains this substance. · Japan-Create EMSs in consolidated MECA21 confirmation sheet substitution technique. dealers (19 companies). Gradually expand environmental laws in MECA21 Reduce the number of parts which Use of lead was eliminated except for Zero use (except for solder, batteries and (1. Compliance with Environmental Laws; confirmation sheet was delayed, but the Expand MECA21 to all sales companies; Lead: zero use (except for exempt parts) the scope to include major dealerships 2. Appropriate Processing of Industrial Waste). contains lead. exempt parts. lead-added free-machining steel). from FY2006 (FY2007–FY2008). materials for MECA21 confirmation sheets start test introduction targeting EMS · Hold explanatory meetings during the and business processes were developed to construction at Mazda and Mazda Anfini Reduce the number of the parts which Use of mercury was eliminated except for Zero use (except for LCDs, discharge · Extend the approval system for second half of FY2005. Promote Mercury: zero use (except for exempt parts) independent dealerships to gain ensure their introduction during FY2006. dealers. contains mercury. exempt parts. headlights, etc.) preparation to start company-wide MECA21 induction and trials commenced Use of cadmium was eliminated except for certification (FY2008–FY2009). Cadmium: zero use Reduce the part count for vehicles. Zero use. activities in FY2006, following trial during the first half of FY2006. exempt parts. implementation. Technologies which reduce the amount of Reduce the amount of refrigerants used in Scope/Initiative 15: Promotion of environmental protection activities with parts dealers car air-conditioners: reduce the use of Reduce the amount of HFCs by 10% or HFCs by 10% or more compared to the Reduce the amount of HFCs by 10% or hydrofluorocarbons (HFCs) by 20% or more more, compared to the FY1995 level. FY1995 level were installed in the Mazda2, more compared to the FY1995 level. EMS construction activities started at Verisa, Mazda3, Mazda5, Mazda6, MX-5, Draft EMS manuals at the five pilot from the FY1995 level. Introduce Mazda EMS at Mazda parts Introduce and operate on EMS at parts parts dealers (EMS explanatory meetings, companies; Aim for one EMS model parts RX-8 and the Mazda MPV. dealers (13 companies). dealers. with training seminars at five pilot CFC alternatives: Promote development companies). dealer to gain certification. and application of new alternative Promote development of new Mazda carried out research into new Promote further development of new air-conditioner refrigerants less harmful than environmentally friendly air-conditioner refrigerants for car air-conditioners that are environmentally friendly air-conditioner CFCs, such as HFC134a. refrigerants. less harmful to the environment. refrigerants. Scope/Initiative 7: Reduce amount of volatile organic compounds (VOCs) in vehicle cabin space · A body sealer with reduced VOC emissions Establish VOC reduction technologies that Conform with the indoor aerial was adopted. meet the indoor aerial concentration 5. Creating a better environment in cooperation with local communities and society concentration guideline values stipulated by · Measured to lower VOC emissions were guideline values stipulated by the Japan Promote cabin VOC reduction. the Japan Ministry of Health, Labour and employed for some interior parts. Ministry of Health, Labour and Welfare Scope/Initiative 16: Promotion of communications with society as a whole Welfare in all all-new models. · A deodorizing filter with an aldehyde removal (voluntary targets by the Japan Automobile feature was offered as an option on core models. Manufacturers Association, Inc.). · Exhibit at Eco Car World and Environment Monthly Environmental Exhibition (in · Exhibited at the Eco Car World and Scope/Initiative 8: End-of-life Vehicle recycling (at the development stage) Environment Monthly Environmental · Host and positively participate in Host and positively participate in Japan). Exhibition. environmental events. Promote new vehicle development environmental events. · Publish the Social & Environmental Report Create new vehicles that are easy to Attain a recyclability ratio of 90% or more in The new MPV and MX-5 achieved a · Publish The Social & Environmental · Promote Team Minus 6% activities. facilitating simple dismantling and recycling 2005. Report 2005. disassemble and recycle. new models. recyclability ratio of 90% or more. of plastic parts and other components. · Promote Team Minus 6% activities. Develop state-of-the-art bumper recycling Expand application of proprietary Recycled bumper material was used for the Promote the development of Scope/Initiative 17: Promotion of social contribution activities technology and to use recycled materials bumper-to-bumper recycling technology. Mazda MPV as well as the RX-8. bumper-to-bumper recycling technology. for new vehicle parts. · Participate actively in voluntary · Participate in voluntary neighborhood · Participated in voluntary neighborhood · Participate actively in voluntary Promote the development of bioplastics A high strength and heat resistant neighborhood clean-up activities. clean-up activities. clean-up activities. neighborhood clean-up activities. Develop basic technologies for bioplastic Promote the development of bioplastic · Dispatch lecturers for environmental · Dispatch lecturers for environmental · Dispatched lecturers for environmental · Dispatch lecturers for environmental that have sufficient quality, strength and materials. bioplastic was developed thanks to a joint parts. heat resistance to be used for interior parts. industry-government-academia project. education. education. education. education.

59 Social & Environmental Report 2006 60 FY2005 Performance Report “Mazda Green Plan 2010” Environmental Mid-Term Plan

The company launched the Mazda Green Plan 2010, its environmental mid-term plan, during 2006 to advance its Environmental Action Promotion Plan that aims to reduce the environmental impact in various facets of its corporate activities. This plan clarifies target categories and objectives and paves the way to attaining these goals.

FY2010 targets FY2005 targets FY2005 results FY2006 targets FY2010 targets FY2005 targets FY2005 performance FY2006 targets 1. Creation of environmentally sound technologies and products 2. Corporate activities to conserving resources and energy Scope/Initiative 1: Cleaner exhaust emissions Scope/Initiative 9: Reduction of waste substances · In Japan, the SU-LEV standard was · Reduce direct landfill waste to 1% or less achieved for the Mazda MPV, Premacy (680 tons/year) of FY1990’s figure. · Direct landfill waste was reduced to 0.5% (Mazda5), Demio (Mazda2), Atenza Eradicate all landfill waste from domestic Reduce all landfill waste to 0.4% or less Japan—Achieve the SU-LEV ( ) Gain SU-LEV/U-LEV approval for 90% of its production operations. · Stop incineration and emit no incinerated (356 tons/year) of FY1990’s figure. (300 tons/year) of FY1990’s figure standard in most of its passenger vehicles. passenger cars by the end of 2005. (Mazda6), Verisa and Axela (Mazda3). Japan—Expand launch of SU-LEVs ash by waste reduction and promotion of · Stopped the incinerators as planned. · Mazda achieved the standard for 92.3% of ( ). recycling. its passenger vehicles (75.1% for SU-LEV and 17.2% for U-LEV). Reduce the consumption of packaging and Reduce the consumption of packaging and Reduced the consumption of packaging Reduce the consumption of packaging and wrapping materials by 30% from the wrapping materials by 19.1% from the and wrapping materials by 20.5% from the wrapping materials by 23.3% from the United States—Promote introduction of Expand the number of vehicles conforming The Tier2/LEV2 regulations were met for All models conformed to Tier2/LEV2 FY1999 level. FY1999 level. FY1999 level. FY1999. low-emission vehicles that meet Tier2/LEV2 to Tier2/LEV2 regulations. most vehicles. regulations. regulations. Scope/Initiative 10: Prevention of global warming Europe—Develop and launch Introduce clean diesel passenger vehicles DPF engine models were introduced for the Promote development of diesel vehicles Cut domestic production operations’ CO Cut domestic production operations’ CO2 Achieved 24.2% CO2 emissions cut Cut domestic production operations’ CO2 next-generation clean diesel vehicles. equipped with diesel particulate filters (DPF) Mazda3, Mazda5 and Mazda6. with enhanced clean functions. 2 exceeding Euro4 regulations. emissions by 10% compared to FY1990. emissions by 5% compared to FY1990. compared to FY1990. emissions by 8% compared to FY1990.

Cut logistics operations’ CO2 emissions by Cut logistics operations’ CO2 emissions by Achieved 12% CO2 emissions cut from Cut logistics operations’ CO2 emissions by Scope/Initiative 2: Improved fuel economy 15% compared to FY1999. 11% compared to FY1999. logistics operations compared to FY1999. 14% compared to FY1999. Japan—Continue to meet the fuel efficiency standards for 2010 for all weight classes of Achieve the 2010 fuel efficiency standards The 2010 fuel efficiency standards were Achieve the 2010 fuel efficiency standards Scope/Initiative 11: Vehicle recycling promotion passenger vehicles, and promote further for all weight classes of passenger vehicles. achieved for all passenger vehicles except for all weight classes of passenger vehicles. improvements in fuel economy for the for the 1.5-ton passenger vehicle class. · Achieve 2015 regulation values a head of Promote the enhancement of ASR An ASR recycling ratio of 63% and an Promote further enhancements of the ASR Japanese market. time. recycling ratio (the effective recycling ratio effective total vehicle recycling ratio of 94% recycling ratio (actual recycle rate for total · ASR recycling ratio: 70%; Total vehicle for total vehicles). were achieved. vehicle). United States—Continue to meet the Corporate Achieve CAFE regulations (passenger cars: For both passenger cars and commercial Continue to meet CAFE fuel economy recycling ratio: 95% Average Fuel Economy (CAFE) regulations, which 27.5 mpg; commercial vehicles: 21.0 mpg). vehicles, CAFE fuel economy standards standards. are expected to become stricter in the future. were achieved. Collect more waste bumpers from Mazda Collect 52,000 or more pieces. Collected 52,476 pieces. Collect 60,000 pieces or more. Corporate average CO2 emissions were dealerships in Japan. Europe—Promote reduction of the Reduce corporate average CO2 generation Reduce corporate average CO2 emissions corporate average CO emissions. to below FY2004 values. reduced by 4.6 g/km from the FY2004 level to below FY2005 values. 2 (internal calculation). Scope/Initiative 3: Vehicle weight reduction Plans to reduce vehicle weight were Achieve Mazda’s target vehicle weight. Promote vehicle weight reduction. pursued, such as installing aluminum Further promote vehicle weight reduction. bonnets and trunk lids on the Mazda MX-5. 3. Corporate activities in pursuit of a clean environment Scope/Initiative 4: Vehicle Noise reduction Scope/Initiative 12: Reduce VOC emissions Meet Mazda’s voluntary standards for noise Meet Mazda’s voluntary standards for noise The vehicle noise reduction level for all Continue to meet the voluntary standards Reduce VOC emissions to 30 g/m2 of Reduce VOC emissions to 35 g/m2 of VOC emissions were reduced to 34.3 g/m2 VOC emissions were reduced to 34.0 g/m2 reduction, which are stricter than the latest reduction, which are stricter than the latest vehicles met Mazda’s voluntary standard coated surfaces. coated surfaces. of coated surfaces. of coated surfaces. noise regulations. noise regulations. figures. for all vehicles. Scope/Initiative 5: Development of alternative fuel vehicles · Mazda commenced leasing of the world’s first hydrogen rotary engine cars, the Mazda RX-8 Develop and introduce more vehicles Launch hydrogen rotary engine vehicles on Hydrogen RE, and delivered one vehicle each Promote Development of hydrogen rotary equipped with the hydrogen rotary engine. the market. to two energy-related companies. engine vehicles. 4. Working with others in our business activities to create a better environment · The Premacy Hydrogen RE Hybrid was exhibited at the Tokyo Motor Show (2005). Scope/Initiative 13: Promotion of cooperative activities with suppliers Ten Tribute Hybrids were donated to the Promote development of hybrid vehicles. Launch the Tribute Hybrid into the market. Orange County Fire Authority in California, Promote development of hybrid vehicles. · Encourage major suppliers to construct in the United States. Promote the creation of environmental Encourage major suppliers to gain Achieved ISO14001 certification in 97% of environmental management systems Promote development of alternative fuel Launch vehicles compatible with B5 fuel. management systems (EMSs) at suppliers; ISO14001 approval (target: 97%). major suppliers. (target 100%). technologies for biomass fuels and (B5 is a blend of 5% biomass fuel and 95% Technology that enables use of B5 was Promote development of alternative fuel Maintain and improve EMSs for suppliers. · Expand these efforts to include local synthetic fuels petroleum diesel fuel.) introduced in Europe. technologies. secondary suppliers. Scope/Initiative 6: Reduce the use of environmental substances of concern Scope/Initiative 14: Promotion of environmental protection activities by sales companies · Add a provision for compliance with the Reduce the number of parts which Use of hexavalent chromium in some parts Hexavalent chromium: zero use by the end was eliminated through development of a zero use by the end of 2006. most recent environmental laws to Reflection of compliance with latest of 2006. contains this substance. · Japan-Create EMSs in consolidated MECA21 confirmation sheet substitution technique. dealers (19 companies). Gradually expand environmental laws in MECA21 Reduce the number of parts which Use of lead was eliminated except for Zero use (except for solder, batteries and (1. Compliance with Environmental Laws; confirmation sheet was delayed, but the Expand MECA21 to all sales companies; Lead: zero use (except for exempt parts) the scope to include major dealerships 2. Appropriate Processing of Industrial Waste). contains lead. exempt parts. lead-added free-machining steel). from FY2006 (FY2007–FY2008). materials for MECA21 confirmation sheets start test introduction targeting EMS · Hold explanatory meetings during the and business processes were developed to construction at Mazda and Mazda Anfini Reduce the number of the parts which Use of mercury was eliminated except for Zero use (except for LCDs, discharge · Extend the approval system for second half of FY2005. Promote Mercury: zero use (except for exempt parts) independent dealerships to gain ensure their introduction during FY2006. dealers. contains mercury. exempt parts. headlights, etc.) preparation to start company-wide MECA21 induction and trials commenced Use of cadmium was eliminated except for certification (FY2008–FY2009). Cadmium: zero use Reduce the part count for vehicles. Zero use. activities in FY2006, following trial during the first half of FY2006. exempt parts. implementation. Technologies which reduce the amount of Reduce the amount of refrigerants used in Scope/Initiative 15: Promotion of environmental protection activities with parts dealers car air-conditioners: reduce the use of Reduce the amount of HFCs by 10% or HFCs by 10% or more compared to the Reduce the amount of HFCs by 10% or hydrofluorocarbons (HFCs) by 20% or more more, compared to the FY1995 level. FY1995 level were installed in the Mazda2, more compared to the FY1995 level. EMS construction activities started at Verisa, Mazda3, Mazda5, Mazda6, MX-5, Draft EMS manuals at the five pilot from the FY1995 level. Introduce Mazda EMS at Mazda parts Introduce and operate on EMS at parts parts dealers (EMS explanatory meetings, companies; Aim for one EMS model parts RX-8 and the Mazda MPV. dealers (13 companies). dealers. with training seminars at five pilot CFC alternatives: Promote development companies). dealer to gain certification. and application of new alternative Promote development of new Mazda carried out research into new Promote further development of new air-conditioner refrigerants less harmful than environmentally friendly air-conditioner refrigerants for car air-conditioners that are environmentally friendly air-conditioner CFCs, such as HFC134a. refrigerants. less harmful to the environment. refrigerants. Scope/Initiative 7: Reduce amount of volatile organic compounds (VOCs) in vehicle cabin space · A body sealer with reduced VOC emissions Establish VOC reduction technologies that Conform with the indoor aerial was adopted. meet the indoor aerial concentration 5. Creating a better environment in cooperation with local communities and society concentration guideline values stipulated by · Measured to lower VOC emissions were guideline values stipulated by the Japan Promote cabin VOC reduction. the Japan Ministry of Health, Labour and employed for some interior parts. Ministry of Health, Labour and Welfare Scope/Initiative 16: Promotion of communications with society as a whole Welfare in all all-new models. · A deodorizing filter with an aldehyde removal (voluntary targets by the Japan Automobile feature was offered as an option on core models. Manufacturers Association, Inc.). · Exhibit at Eco Car World and Environment Monthly Environmental Exhibition (in · Exhibited at the Eco Car World and Scope/Initiative 8: End-of-life Vehicle recycling (at the development stage) Environment Monthly Environmental · Host and positively participate in Host and positively participate in Japan). Exhibition. environmental events. Promote new vehicle development environmental events. · Publish the Social & Environmental Report Create new vehicles that are easy to Attain a recyclability ratio of 90% or more in The new MPV and MX-5 achieved a · Publish The Social & Environmental · Promote Team Minus 6% activities. facilitating simple dismantling and recycling 2005. Report 2005. disassemble and recycle. new models. recyclability ratio of 90% or more. of plastic parts and other components. · Promote Team Minus 6% activities. Develop state-of-the-art bumper recycling Expand application of proprietary Recycled bumper material was used for the Promote the development of Scope/Initiative 17: Promotion of social contribution activities technology and to use recycled materials bumper-to-bumper recycling technology. Mazda MPV as well as the RX-8. bumper-to-bumper recycling technology. for new vehicle parts. · Participate actively in voluntary · Participate in voluntary neighborhood · Participated in voluntary neighborhood · Participate actively in voluntary Promote the development of bioplastics A high strength and heat resistant neighborhood clean-up activities. clean-up activities. clean-up activities. neighborhood clean-up activities. Develop basic technologies for bioplastic Promote the development of bioplastic · Dispatch lecturers for environmental · Dispatch lecturers for environmental · Dispatched lecturers for environmental · Dispatch lecturers for environmental that have sufficient quality, strength and materials. bioplastic was developed thanks to a joint parts. heat resistance to be used for interior parts. industry-government-academia project. education. education. education. education.

59 Social & Environmental Report 2006 60 FY2005 Performance Report FY2005 Performance Report Overview of Mazda’s Corporate Activities and Impact on the Environment LCA Measures

Mazda collects and uses ecological data to help reduce the environmental impact of its corporate activities in all areas. Whether dealing with cars in production, on the road, or at the end of their life, Mazda constantly monitors Additionally, we are contributing to global environmental conservation by providing customers with products the environmental impact of each facet of its operations. We are aiming to reduce that incorporate leading environmental technologies. the environmental burden of the entire vehicle lifecycle.

Mazda strives to conduct effective operations while enforcing the efficient use Life Cycle Assessment (LCA) is a system for evaluating and disposal. To ensure reduction of the environmental of resources and the reduction of environmentally hazardous waste. In this environmental load (such as CO2 emissions) throughout a load, Mazda has built a database for LCA evaluation and way Mazda hopes to reduce the environmental risk and contribute to the vehicle’s lifecycle. This spans sourcing materials, implementation techniques and is furthering research into formation of a recycling-oriented society. manufacturing parts, vehicle and parts use, maintenance various LCA methodologies. Figures represent Mazda Motor Corporation’s unconsolidated results for FY2005.

Number of 1 Materials Water End-of-life vehicles recycling results*4 Energy consumption* purchased consumption bumpers collected and recycled Automobile Shredder 16,263,000 m3 Airbags Fluorocarbons 3 Residue (ASR) 8,901×10 GJ Of which rainwater 27,000 m3 Raw materials (steel, aluminum, etc.): Total weight collected Weight of recycled materials Total weight collected Total number of vehicles collected kg kg Energy source 263,000 tons 29,106tons 5,014.2 42,110 129,516 Chemical Weight of recycled materials Quantity collected: Weight collected Number of vehicles collected Electricity 6,045 Kerosene 19 LPG 55 Paper substances 52,476 units purchased 18,373tons 51,473 units CFC 14,938 kg 50,289 Heavy oil A 12 Diesel 11 City gas 1,078 297.9 tons Number of vehicles collected: Number of vehicles collected: Weight collected Number of vehicles collected Heavy oil C 1,238 Gasoline 10 Coke 433 8,836 tons 167,835 32,404 HFC 27,172 kg 79,227 *1 Production processes only *4 Figures for FY2005 based on the End-of-Life Vehicle Recycling Law. For details, see “Recycling End-of-Life Vehicles” on page 83.

Purchasing Research and development Production Distribution In the marketplace End-of-life vehicles

Encouraging business partners Increasing fuel efficiency Saving energy Reducing CO2 through efficient Edifying customers Appropriate collection and to gain ISO14001 certification Cleaner exhaust emissions Reducing direct landfill waste distribution Promoting Complying with recycling Promoting green procurement Reducing vehicle noise Controlling chemical substances Reducing and recycling environmental laws and promoting Developing clean-energy vehicles Promoting clean production packaging and wrapping environmental beautification Promoting recycling, etc. materials Collecting damaged bumpers

Emissions of Chemical Results for Shipments of low-pollution and other vehicles (domestic): 198,229 SOx 5 COX greenhouse SOX emissions Wastewater substances production operations Wholesales volumes* gasses*2 Discharge/ Hydrogen vehicles: 2 CO2 emissions transfer reduced by 24.2% Natural gas vehicles: 18 tons 3 compared with 582 7,840,000 m FY1990 level*3 LPG-fueled diesel replacement vehicles: 134 Discharge Direct landfill waste units LPG vehicles replacing diesels*6 reduced by 99.5% 1,148,653 Direct 1,315 tons compared with FY1990 75% lower than 2005 exhaust emissions standards: 137,854 1,001,000 tons -CO2 NOx level NOX landfill emissions Discharged chemical Domestic: 290,012 units 50% lower than 2005 exhaust emissions standards: 56,239 waste Transfer substances (PRTR Overseas: 858,641 units 50% lower than 2000 exhaust emissions standards: 3,909 14 tons substances) reduced by 52% compared with 25% lower than 2000 exhaust emissions standards: 73 882 tons 356 tons FY1998 level

*2 Greenhouse gas emissions are calculated based on the Law Concerning the Promotion of the Measures to Cope with Global Warming (revised 2005) *5 Includes completed vehicles, parts for overseas production (KD sets), and OEM vehicles 3 Volume of CO2 emitted through production operations is defined as Mazda Motor Corporation’s unconsolidated emissions for FY2005 6 Vehicles attaining fuel consumption standards based on the Law Concerning the Rational Use of Energy, and emissions standards based on the Low-Emission Vehicle * * (LEV) certification requirements.

61 Social & Environmental Report 2006 Social & Environmental Report 2006 62 FY2005 Performance Report FY2005 Performance Report Overview of Mazda’s Corporate Activities and Impact on the Environment LCA Measures

Mazda collects and uses ecological data to help reduce the environmental impact of its corporate activities in all areas. Whether dealing with cars in production, on the road, or at the end of their life, Mazda constantly monitors Additionally, we are contributing to global environmental conservation by providing customers with products the environmental impact of each facet of its operations. We are aiming to reduce that incorporate leading environmental technologies. the environmental burden of the entire vehicle lifecycle.

Mazda strives to conduct effective operations while enforcing the efficient use Life Cycle Assessment (LCA) is a system for evaluating and disposal. To ensure reduction of the environmental of resources and the reduction of environmentally hazardous waste. In this environmental load (such as CO2 emissions) throughout a load, Mazda has built a database for LCA evaluation and way Mazda hopes to reduce the environmental risk and contribute to the vehicle’s lifecycle. This spans sourcing materials, implementation techniques and is furthering research into formation of a recycling-oriented society. manufacturing parts, vehicle and parts use, maintenance various LCA methodologies. Figures represent Mazda Motor Corporation’s unconsolidated results for FY2005.

Number of 1 Materials Water End-of-life vehicles recycling results*4 Energy consumption* purchased consumption bumpers collected and recycled Automobile Shredder 16,263,000 m3 Airbags Fluorocarbons 3 Residue (ASR) 8,901×10 GJ Of which rainwater 27,000 m3 Raw materials (steel, aluminum, etc.): Total weight collected Weight of recycled materials Total weight collected Total number of vehicles collected kg kg Energy source 263,000 tons 29,106tons 5,014.2 42,110 129,516 Chemical Weight of recycled materials Quantity collected: Weight collected Number of vehicles collected Electricity 6,045 Kerosene 19 LPG 55 Paper substances 52,476 units purchased 18,373tons 51,473 units CFC 14,938 kg 50,289 Heavy oil A 12 Diesel 11 City gas 1,078 297.9 tons Number of vehicles collected: Number of vehicles collected: Weight collected Number of vehicles collected Heavy oil C 1,238 Gasoline 10 Coke 433 8,836 tons 167,835 32,404 HFC 27,172 kg 79,227 *1 Production processes only *4 Figures for FY2005 based on the End-of-Life Vehicle Recycling Law. For details, see “Recycling End-of-Life Vehicles” on page 83.

Purchasing Research and development Production Distribution In the marketplace End-of-life vehicles

Encouraging business partners Increasing fuel efficiency Saving energy Reducing CO2 through efficient Edifying customers Appropriate collection and to gain ISO14001 certification Cleaner exhaust emissions Reducing direct landfill waste distribution Promoting Complying with recycling Promoting green procurement Reducing vehicle noise Controlling chemical substances Reducing and recycling environmental laws and promoting Developing clean-energy vehicles Promoting clean production packaging and wrapping environmental beautification Promoting recycling, etc. materials Collecting damaged bumpers

Emissions of Chemical Results for Shipments of low-pollution and other vehicles (domestic): 198,229 SOx 5 COX greenhouse SOX emissions Wastewater substances production operations Wholesales volumes* gasses*2 Discharge/ Hydrogen vehicles: 2 CO2 emissions transfer reduced by 24.2% Natural gas vehicles: 18 tons 3 compared with 582 7,840,000 m FY1990 level*3 LPG-fueled diesel replacement vehicles: 134 Discharge Direct landfill waste units LPG vehicles replacing diesels*6 reduced by 99.5% 1,148,653 Direct 1,315 tons compared with FY1990 75% lower than 2005 exhaust emissions standards: 137,854 1,001,000 tons -CO2 NOx level NOX landfill emissions Discharged chemical Domestic: 290,012 units 50% lower than 2005 exhaust emissions standards: 56,239 waste Transfer substances (PRTR Overseas: 858,641 units 50% lower than 2000 exhaust emissions standards: 3,909 14 tons substances) reduced by 52% compared with 25% lower than 2000 exhaust emissions standards: 73 882 tons 356 tons FY1998 level

*2 Greenhouse gas emissions are calculated based on the Law Concerning the Promotion of the Measures to Cope with Global Warming (revised 2005) *5 Includes completed vehicles, parts for overseas production (KD sets), and OEM vehicles 3 Volume of CO2 emitted through production operations is defined as Mazda Motor Corporation’s unconsolidated emissions for FY2005 6 Vehicles attaining fuel consumption standards based on the Law Concerning the Rational Use of Energy, and emissions standards based on the Low-Emission Vehicle * * (LEV) certification requirements.

61 Social & Environmental Report 2006 Social & Environmental Report 2006 62 FY2005 Performance Report Environmental Management

In order to ensure appropriate and effective environmental management throughout Mazda, including all companies in the Mazda group and our suppliers, we are reinforcing our measures and systems as well as creating various countermeasures against anticipated risks.

Reinforcing our Environmental The Mazda Development Environmental Committee Environmental Management System Environmental Incidents and Complaints Environmental Evaluation, adoption and promotion of environmental Management System Promotion System protection activities in the development and design areas and Compliance with Environmental Laws Exhaust emissions Fuel economy Reduced vehicle weight (as of July 1, 2005) Vehicle noise Alternative fuels Recycling Substances of concern Reduction in cabin VOCs In July 2005, we revised the Mazda environmental promotion To bolster environmental response and reduce the During FY2005, Mazda experienced no environmental Production Environmental Committee system to further accelerate environmental activities environmental impact, Mazda strongly encourages the accidents or incidents that could lead to environmental Evaluation, adoption and promotion of environmental protection group-wide. Mazda Environmental activities in the production, logistics and business areas companies with which it conducts business to gain ISO14001 pollution, and recorded no incidents of legal or regulatory Production area (zero emissions, energy conservation, We superseded the existing Mazda Global Environmental Committee PRTR, VOCs, etc.) certification for their environmental management systems. contravention. Logistics area (reduction in CO2 emissions, reduction in Conference with the Mazda Environmental Committee, chaired Chair packing and packaging materials, etc.) During FY2000, the company’s six principal production Environmental problems totaled 11, comprising eight relating President Business area (energy conservation, reduction in paper by the president. Moreover, to promote responsiveness in use, waste sorting, etc.) facilities in Japan and overseas all received ISO14001 to odor two to noise and one to dust. The noise and dust Executive Officer in specific areas of our operations, we established five subsidiary charge of Environment Purchasing Environmental Committee certification. This recognition was extended to its six domestic issues were resolved immediately, and measures are in place committees, headed by our environmental officer and affiliates, not including dealerships, during FY2001. The head to deal with the problems of odors. [Functions] Clarification of environmental policy as related to advanced the global perspective of our environmental Evaluation and purchasing, support and promotion of environmental office research and development divisions also gained adoption of mid- and protection activities by suppliers measures. long-term planning, Common application of the Mazda Global Environmental Charter certification during FY2003, and the Mazda Parts Center and evaluation and Evaluation of compliance with environmental laws and Environmental Risk Management Of these five committees, the Sales and Service verification of regulations Mazda Training Center were added to the certified facilities in performance Promotion of the Mazda EMS certification program Environmental Committee and the Purchasing Environmental the Hiroshima District during FY2004. Formulation and Sales and Services Environmental Committee Committee serve to strengthen support to our sales and promotion of group We are investigating the future introduction of EMS for wide environmental Clarification of environmental policy as related to sales procurement partners. We have commenced measures to policy and services, support and promotion of environmental small-scale facilities and Mazda group companies that have not Environmental risk arises in diverse aspects of operations—in Decisions related to protection activities by vehicle and parts dealers encourage vehicle and parts dealerships to adopt the Mazda resource allocation Common application of the Mazda Global Environmental Charter yet gained certification. manufacturing areas such as production processes and Evaluation of compliance with environmental laws and Environmental Management System (EMS). This program regulations We also promote ISO14001 certification for Mazda’s facilities through to the products themselves. Mazda Promotion of the Mazda EMS certification program seeks to reduce the environmental impact of our operations Administration Office principal suppliers, such as parts and materials suppliers. By implements environmental risk assessments to minimize risks and to minimize the risk of environmental accidents and other Recycling Promotion Committee the end of FY2005, 97% of our suppliers had gained this mark and to prevent pollution and other incidents. While incidents. Promoting recycling of end-of-life vehicles of approval. Mazda also encourages the introduction of EMS strengthening preventative strategies, periodically we also Appropriate processing and recycling for end-of-life Through such measures, the Mazda group is striving for vehicles in the domestic market for its small-scale suppliers with strong links to local conduct emergency response training and other measures to Guidance and support for domestic dealers in vehicle lower environmental impact throughout the supply chain, and is recycling methods communities. promote action against environmental risks. Technology surveys and feedback to R&D concerning eagerly pursing measures in production, sales and services to processing of end-of-life vehicles in the domestic market Progress of Mazda group ISO14001 certification Each plant and facility carries out its own monitoring and Appropriate processing and recycling for end-of-life achieve this goal. vehicles in the European market strategies for prevention of air pollution, water quality deterioration and pollution related to waste product processing. Close-up Environmental Auditing Environmental monitoring checklist Reinforcing Communication Between Mazda Group Companies

We are improving communications through regular meetings Suppliers are required to periodically submit field data on between representatives from domestic dealerships and parts environmental impact to Mazda in order to encourage Annual audits are carried out in the Hiroshima area, at the Hofu Environmental Education dealerships and executive officers in charge of domestic sales. environmental communication throughout the Mazda group. Plant and in research and development divisions by the internal During FY2005, we strengthened measures targeting the audit and external examination bodies to confirm the effective following four issues relating to CSR and the environment. functioning of EMS. Mazda conducts job-specific training based on EMS for new The internal audit is carried out by internal auditors, employees, managers, team leaders, foremen and other 1 3 Establishment of a CSR Thorough risk instructed by qualified middle management who have managers. system management Designation of a manager for Rapid provision of information undergone training at an external auditing agency. Their review In addition, each operational department carries out ongoing compliance activities to Mazda Regular internal audits Rapid and legal responses comprises a cross-sectional company-wide audit of employee education to raise environmental awareness and MECA21 training A meeting to explain Mazda’s EMS environment-related issues. enhance the effectiveness of Mazda’s EMS. During FY2005, a 2 Establishment of an 4 Observance of organization to a parts dealerships organizational approach environmental laws and During FY2005, the internal audit revealed one serious and total of 27,741 staff benefited from the company’s stressing CSR regulations Personal Message 31 minor problems, in addition to 80 observation. The external environmental education programs. Regular employee awareness Enhanced promotion of audit by an external ISO14001 accreditation organization In addition, we support and encourage employees to gain activities MECA21* Compliance with Environmental Laws resulted in no major or minor citations and only 8 observations. public qualifications related to the environment, and solicit *(Mazda’s Environment Care Approach21: an environmental action or guideline Parts sales companies do not have as establishment by the Mazda Dealership Association in Japan) These audit results were reported at the management level and contributions towards environment-related issues and much of a manufacturing impact on the With particular emphasis on the environment, we have revised corrective measures were swiftly implemented. countermeasures from within the company. environment, but they are responsible for MECA21 to strengthen compliance with environmental laws at storage and handling of motor oil and Status of implementation of internal audits Environmental education system dealerships. In addition, we have begun to introduce the various chemical products. Mazda Tetsuo Changes in internal auditors Environmental education participants Mazda EMS, which systemizes our approach for dealerships supports the implementation of Yamashita Checklist for internal audits and parts dealerships. Domestic Parts Sales measures to comply with environmental Department Mazda provides support for the construction and laws on handling noxious substances implementation of EMS, and cooperates with dealerships and and reducing the risks of oil leakages. parts dealerships to aid adoption of environmental activities.

63 Social & Environmental Report 2006 Social & Environmental Report 2006 64 FY2005 Performance Report Environmental Management

In order to ensure appropriate and effective environmental management throughout Mazda, including all companies in the Mazda group and our suppliers, we are reinforcing our measures and systems as well as creating various countermeasures against anticipated risks.

Reinforcing our Environmental The Mazda Development Environmental Committee Environmental Management System Environmental Incidents and Complaints Environmental Evaluation, adoption and promotion of environmental Management System Promotion System protection activities in the development and design areas and Compliance with Environmental Laws Exhaust emissions Fuel economy Reduced vehicle weight (as of July 1, 2005) Vehicle noise Alternative fuels Recycling Substances of concern Reduction in cabin VOCs In July 2005, we revised the Mazda environmental promotion To bolster environmental response and reduce the During FY2005, Mazda experienced no environmental Production Environmental Committee system to further accelerate environmental activities environmental impact, Mazda strongly encourages the accidents or incidents that could lead to environmental Evaluation, adoption and promotion of environmental protection group-wide. Mazda Environmental activities in the production, logistics and business areas companies with which it conducts business to gain ISO14001 pollution, and recorded no incidents of legal or regulatory Production area (zero emissions, energy conservation, We superseded the existing Mazda Global Environmental Committee PRTR, VOCs, etc.) certification for their environmental management systems. contravention. Logistics area (reduction in CO2 emissions, reduction in Conference with the Mazda Environmental Committee, chaired Chair packing and packaging materials, etc.) During FY2000, the company’s six principal production Environmental problems totaled 11, comprising eight relating President Business area (energy conservation, reduction in paper by the president. Moreover, to promote responsiveness in use, waste sorting, etc.) facilities in Japan and overseas all received ISO14001 to odor two to noise and one to dust. The noise and dust Executive Officer in specific areas of our operations, we established five subsidiary charge of Environment Purchasing Environmental Committee certification. This recognition was extended to its six domestic issues were resolved immediately, and measures are in place committees, headed by our environmental officer and affiliates, not including dealerships, during FY2001. The head to deal with the problems of odors. [Functions] Clarification of environmental policy as related to advanced the global perspective of our environmental Evaluation and purchasing, support and promotion of environmental office research and development divisions also gained adoption of mid- and protection activities by suppliers measures. long-term planning, Common application of the Mazda Global Environmental Charter certification during FY2003, and the Mazda Parts Center and evaluation and Evaluation of compliance with environmental laws and Environmental Risk Management Of these five committees, the Sales and Service verification of regulations Mazda Training Center were added to the certified facilities in performance Promotion of the Mazda EMS certification program Environmental Committee and the Purchasing Environmental the Hiroshima District during FY2004. Formulation and Sales and Services Environmental Committee Committee serve to strengthen support to our sales and promotion of group We are investigating the future introduction of EMS for wide environmental Clarification of environmental policy as related to sales procurement partners. We have commenced measures to policy and services, support and promotion of environmental small-scale facilities and Mazda group companies that have not Environmental risk arises in diverse aspects of operations—in Decisions related to protection activities by vehicle and parts dealers encourage vehicle and parts dealerships to adopt the Mazda resource allocation Common application of the Mazda Global Environmental Charter yet gained certification. manufacturing areas such as production processes and Evaluation of compliance with environmental laws and Environmental Management System (EMS). This program regulations We also promote ISO14001 certification for Mazda’s facilities through to the products themselves. Mazda Promotion of the Mazda EMS certification program seeks to reduce the environmental impact of our operations Administration Office principal suppliers, such as parts and materials suppliers. By implements environmental risk assessments to minimize risks and to minimize the risk of environmental accidents and other Recycling Promotion Committee the end of FY2005, 97% of our suppliers had gained this mark and to prevent pollution and other incidents. While incidents. Promoting recycling of end-of-life vehicles of approval. Mazda also encourages the introduction of EMS strengthening preventative strategies, periodically we also Appropriate processing and recycling for end-of-life Through such measures, the Mazda group is striving for vehicles in the domestic market for its small-scale suppliers with strong links to local conduct emergency response training and other measures to Guidance and support for domestic dealers in vehicle lower environmental impact throughout the supply chain, and is recycling methods communities. promote action against environmental risks. Technology surveys and feedback to R&D concerning eagerly pursing measures in production, sales and services to processing of end-of-life vehicles in the domestic market Progress of Mazda group ISO14001 certification Each plant and facility carries out its own monitoring and Appropriate processing and recycling for end-of-life achieve this goal. vehicles in the European market strategies for prevention of air pollution, water quality deterioration and pollution related to waste product processing. Close-up Environmental Auditing Environmental monitoring checklist Reinforcing Communication Between Mazda Group Companies

We are improving communications through regular meetings Suppliers are required to periodically submit field data on between representatives from domestic dealerships and parts environmental impact to Mazda in order to encourage Annual audits are carried out in the Hiroshima area, at the Hofu Environmental Education dealerships and executive officers in charge of domestic sales. environmental communication throughout the Mazda group. Plant and in research and development divisions by the internal During FY2005, we strengthened measures targeting the audit and external examination bodies to confirm the effective following four issues relating to CSR and the environment. functioning of EMS. Mazda conducts job-specific training based on EMS for new The internal audit is carried out by internal auditors, employees, managers, team leaders, foremen and other 1 3 Establishment of a CSR Thorough risk instructed by qualified middle management who have managers. system management Designation of a manager for Rapid provision of information undergone training at an external auditing agency. Their review In addition, each operational department carries out ongoing compliance activities to Mazda Regular internal audits Rapid and legal responses comprises a cross-sectional company-wide audit of employee education to raise environmental awareness and MECA21 training A meeting to explain Mazda’s EMS environment-related issues. enhance the effectiveness of Mazda’s EMS. During FY2005, a 2 Establishment of an 4 Observance of organization to a parts dealerships organizational approach environmental laws and During FY2005, the internal audit revealed one serious and total of 27,741 staff benefited from the company’s stressing CSR regulations Personal Message 31 minor problems, in addition to 80 observation. The external environmental education programs. Regular employee awareness Enhanced promotion of audit by an external ISO14001 accreditation organization In addition, we support and encourage employees to gain activities MECA21* Compliance with Environmental Laws resulted in no major or minor citations and only 8 observations. public qualifications related to the environment, and solicit *(Mazda’s Environment Care Approach21: an environmental action or guideline Parts sales companies do not have as establishment by the Mazda Dealership Association in Japan) These audit results were reported at the management level and contributions towards environment-related issues and much of a manufacturing impact on the With particular emphasis on the environment, we have revised corrective measures were swiftly implemented. countermeasures from within the company. environment, but they are responsible for MECA21 to strengthen compliance with environmental laws at storage and handling of motor oil and Status of implementation of internal audits Environmental education system dealerships. In addition, we have begun to introduce the various chemical products. Mazda Tetsuo Changes in internal auditors Environmental education participants Mazda EMS, which systemizes our approach for dealerships supports the implementation of Yamashita Checklist for internal audits and parts dealerships. Domestic Parts Sales measures to comply with environmental Department Mazda provides support for the construction and laws on handling noxious substances implementation of EMS, and cooperates with dealerships and and reducing the risks of oil leakages. parts dealerships to aid adoption of environmental activities.

63 Social & Environmental Report 2006 Social & Environmental Report 2006 64 FY2005 Performance Report Environmental Accounting

To grasp the costs and benefits incurred by its environmental protection activities, Mazda has implemented an environmental accounting system, which also aims to raise the efficiency of these activities. In FY2005, we expanded the scope of accounts to include overseas production subsidiaries and began compiling more detailed information.

construction involving the prevention of atmospheric pollution Reference: Domestic Consolidated Companies (units: 100 million yen) The Costs of Environmental Protection (1.32 billion yen), global environmental protection costs (350 Category Investment Expenditure Total Scope of Data Collection million yen) arising from fuel conversion, environmental (1) Domestic consolidated preservation activities and capital investment in energy-saving business area subsidiaries: 30 Costs by Cost of preventing pollution 1.2 2.9 4.1 Environmental protection costs are calculated as expenses for measures, and resource recycling costs (550 million yen). Dealers: 15 Cost of protecting the global environment 0 1.8 1.8 reducing environmental impact, for investment to ensure These increased expenditures were partially offset by reduced Parts dealers: 9 Distributors: 1 environmental protection benefits for the future, and spending on research and development (1.31 billion yen), led Cost of recycling resources 0.3 5.3 5.6 Parts and other management and other costs. These are computed for projects by reduced prototyping. Upstream/downstream costs 0 0.1 0.1 production companies: 3 and product lifecycles throughout all areas of our business. Mazda's calculations are compatible with the environmental Other: 2 Management activity costs 0 2.6 2.6 During FY2005, Mazda’s unconsolidated environmental accounting guidelines and guidebook published by the Ministry (2) Domestic equity-method protection costs rose 150 million yen, to 47.84 billion yen. of the Environment, but are collated using the company’s own Research and development costs 0.2 3.8 4.1 subsidiaries: 7 Principal contributors to this rise were expenditures on standards. Parts dealers: 3 Cost of social activities 0 0 0 Distributors: 1 Cost of environmental damage 0 0 0 Parts and other production companies: 2 Environmental Protection Costs (Unconsolidated) (units: 100 million yen) Total 1.7 16.5 18.2 Other: 1

Category Major activities Investment Expenditure Total

Reference: Overseas Consolidated Companies (units: 100 million yen) Cost of preventing Legislative measures for prevention of air, water and soil pollution, etc 34.5 23.9 58.4 pollution Examples: Measures dealing with VOCs, dust, and paint drying ovens Category Investment Expenditure Total Scope of Data Collection Costs by business area

business area 1. Overseas consolidated

Costs by Cost of preventing pollution 0.1 0.7 0.9 subsidiaries Production: 1 Cost of protecting Prevention of global warming, ozone layer destruction, etc Cost of protecting the global environment 26.2 0.1 26.2 Compania Colombiana the global Examples: Line integration, construction to amend production processes, 9.7 23.4 33.1 Automotriz S.A. environment Cost of recycling resources 0.1 0.6 0.7 conversion of energy sources, etc 2. Overseas equity-method Upstream/downstream costs 0 0 0 subsidiaries Production: 2 Effective utilization of resources, recycling, waste processing and disposal Management activity costs 0 0.4 0.4 Cost of recycling AutoAlliance International, Examples: New chiller recovery process facilities, new related facilities of 6.6 16.4 23.0 Inc., resources Research and development costs 0 0 0 roasting furnace, renovation of the waste stockyard, etc AutoAliance (Thailand) Cost of social activities 0 0 0 Company Limited

Cost of environmental damage 0 0 0 Upstream/downstream Reduction of environmental impact of packaging etc., container recovery, 0 3.7 3.7 costs end-of-life vehicle bumper recovery Total 26.4 2.0 28.4

Environmental training for employees, construction and running of Management activity environmental management systems, monitoring and measurement of 0.1 9.6 9.7 costs environmental impact, information disclosure, nature conservation and beautification around company facilities Environmental Protection Performance

Research and R&D into products, production methods and logistics contributing to reduced 6.6 340.6 347.2 development costs environmental impact Reference: Mazda Unconsolidated Companies Reference: Overseas Consolidated Companies Mazda Overseas Category Units Un- Category Units Consolidated Nature conservation, greenery and scenic improvement, financial and other consolidated Companies Cost of social activities 0 3.6 3.6 support for local residents and groups, information provision Greenhouse gas emissions (annual)* (thousand tons CO2) 1,001.2 Greenhouse gas emissions (annual)* (thousand tons CO2) 244.9

Waste reduction Direct landfill waste thousand tons/year 0.3 Greenhouse gas emissions are calculated based on the Law Concerning the Promotion * of Measures to Cope with Global Warming (revised 2005) Incinerated waste thousand tons/year 6.8 Cost of environmental Remediation expenses, compensation for environmental damage, insurance, etc. 0 0 0 damage Waste output per unit of tons/100 million yen 20.5 sales revenue

Recycling % 99.7

Total 57.5 421.2 478.7 No. of recovered used bumpers thousand units/year 52.4

Greenhouse gas emissions are calculated based on the Law Concerning the Promotion * of Measures to Cope with Global Warming (revised 2005)

65 Social & Environmental Report 2006 Social & Environmental Report 2006 66 FY2005 Performance Report Environmental Accounting

To grasp the costs and benefits incurred by its environmental protection activities, Mazda has implemented an environmental accounting system, which also aims to raise the efficiency of these activities. In FY2005, we expanded the scope of accounts to include overseas production subsidiaries and began compiling more detailed information.

construction involving the prevention of atmospheric pollution Reference: Domestic Consolidated Companies (units: 100 million yen) The Costs of Environmental Protection (1.32 billion yen), global environmental protection costs (350 Category Investment Expenditure Total Scope of Data Collection million yen) arising from fuel conversion, environmental (1) Domestic consolidated preservation activities and capital investment in energy-saving business area subsidiaries: 30 Costs by Cost of preventing pollution 1.2 2.9 4.1 Environmental protection costs are calculated as expenses for measures, and resource recycling costs (550 million yen). Dealers: 15 Cost of protecting the global environment 0 1.8 1.8 reducing environmental impact, for investment to ensure These increased expenditures were partially offset by reduced Parts dealers: 9 Distributors: 1 environmental protection benefits for the future, and spending on research and development (1.31 billion yen), led Cost of recycling resources 0.3 5.3 5.6 Parts and other management and other costs. These are computed for projects by reduced prototyping. Upstream/downstream costs 0 0.1 0.1 production companies: 3 and product lifecycles throughout all areas of our business. Mazda's calculations are compatible with the environmental Other: 2 Management activity costs 0 2.6 2.6 During FY2005, Mazda’s unconsolidated environmental accounting guidelines and guidebook published by the Ministry (2) Domestic equity-method protection costs rose 150 million yen, to 47.84 billion yen. of the Environment, but are collated using the company’s own Research and development costs 0.2 3.8 4.1 subsidiaries: 7 Principal contributors to this rise were expenditures on standards. Parts dealers: 3 Cost of social activities 0 0 0 Distributors: 1 Cost of environmental damage 0 0 0 Parts and other production companies: 2 Environmental Protection Costs (Unconsolidated) (units: 100 million yen) Total 1.7 16.5 18.2 Other: 1

Category Major activities Investment Expenditure Total

Reference: Overseas Consolidated Companies (units: 100 million yen) Cost of preventing Legislative measures for prevention of air, water and soil pollution, etc 34.5 23.9 58.4 pollution Examples: Measures dealing with VOCs, dust, and paint drying ovens Category Investment Expenditure Total Scope of Data Collection Costs by business area

business area 1. Overseas consolidated

Costs by Cost of preventing pollution 0.1 0.7 0.9 subsidiaries Production: 1 Cost of protecting Prevention of global warming, ozone layer destruction, etc Cost of protecting the global environment 26.2 0.1 26.2 Compania Colombiana the global Examples: Line integration, construction to amend production processes, 9.7 23.4 33.1 Automotriz S.A. environment Cost of recycling resources 0.1 0.6 0.7 conversion of energy sources, etc 2. Overseas equity-method Upstream/downstream costs 0 0 0 subsidiaries Production: 2 Effective utilization of resources, recycling, waste processing and disposal Management activity costs 0 0.4 0.4 Cost of recycling AutoAlliance International, Examples: New chiller recovery process facilities, new related facilities of 6.6 16.4 23.0 Inc., resources Research and development costs 0 0 0 roasting furnace, renovation of the waste stockyard, etc AutoAliance (Thailand) Cost of social activities 0 0 0 Company Limited

Cost of environmental damage 0 0 0 Upstream/downstream Reduction of environmental impact of packaging etc., container recovery, 0 3.7 3.7 costs end-of-life vehicle bumper recovery Total 26.4 2.0 28.4

Environmental training for employees, construction and running of Management activity environmental management systems, monitoring and measurement of 0.1 9.6 9.7 costs environmental impact, information disclosure, nature conservation and beautification around company facilities Environmental Protection Performance

Research and R&D into products, production methods and logistics contributing to reduced 6.6 340.6 347.2 development costs environmental impact Reference: Mazda Unconsolidated Companies Reference: Overseas Consolidated Companies Mazda Overseas Category Units Un- Category Units Consolidated Nature conservation, greenery and scenic improvement, financial and other consolidated Companies Cost of social activities 0 3.6 3.6 support for local residents and groups, information provision Greenhouse gas emissions (annual)* (thousand tons CO2) 1,001.2 Greenhouse gas emissions (annual)* (thousand tons CO2) 244.9

Waste reduction Direct landfill waste thousand tons/year 0.3 Greenhouse gas emissions are calculated based on the Law Concerning the Promotion * of Measures to Cope with Global Warming (revised 2005) Incinerated waste thousand tons/year 6.8 Cost of environmental Remediation expenses, compensation for environmental damage, insurance, etc. 0 0 0 damage Waste output per unit of tons/100 million yen 20.5 sales revenue

Recycling % 99.7

Total 57.5 421.2 478.7 No. of recovered used bumpers thousand units/year 52.4

Greenhouse gas emissions are calculated based on the Law Concerning the Promotion * of Measures to Cope with Global Warming (revised 2005)

65 Social & Environmental Report 2006 Social & Environmental Report 2006 66 FY2005 Performance Report Product Development and Research and Development

Reducing exhaust emissions and improving fuel efficiency is paramount to developing and launching environmentally friendly vehicles. To this end, Mazda is accelerating its R&D projects, including work on new energy sources, materials and recycling methods.

Scope FY2005 Target FY2005 Result Developing a Clean Diesel Engine Close-up Compared to gasoline engines, diesel engines are more In Japan, the SU-LEV standard was achieved in the Mazda MPV, Premacy The Mazda6 with our Clean Diesel Engine Japan—Gain SU-LEV/U-LEV approval (Mazda5), Demio (Mazda2), Atenza (Mazda6), Verisa and Axela(Mazda3). fuel-efficient, have higher output and emit less CO2. At the Proves Popular in Europe Cleaner exhaust emissions for 90% of its passenger cars by the Mazda achieved the standard for 92.3% for passenger vehicles (75.1% same time, they present problems in terms of nitrous oxide end of 2005. for SU-LEV and 17.2% for U-LEV). (NOx) and particulate matter emissions. Technologies to reduce The Mazda6, mounted with the MZR-CD, Mazda’s independently these emissions have been developed, however, and in recent developed diesel engine, went on sale in 2002. Winning Car of the years diesel engines have become popular environmentally Year awards in various countries, friendly vehicles, particularly in Europe. the model has enjoyed critical Cleaner Exhaust Emissions By incorporating post-combustion technologies, such as a acclaim in Europe, where diesel diesel particulate filter, in our efficient common-rail vehicles are particularly popular. direct-injection turbo diesel engine, Mazda has succeeded in Working Toward Increased SU-LEV Status: 94% SU-LEV Proportion of Vehicles Achieving Low-Emissions Vehicle creating a clean diesel-engine vehicle that exceeds Europe’s Personal Message Status, Excluding OEM Vehicles (SU-LEVs and U-LEVs) Mazda is actively promoting the development of technologies that Euro4 emissions standards. This engine is mounted in the Good level of fuel efficiency and allow its models to meet the standards set under the Japan Ministry Mazda3, Mazda5 and Mazda6 models, as well as in the Bongo (%) emissions technologies of Land, Infrastructure and Transport’s Emissions Gas Approval 100 and the Titan Dash, which are sold in Japan. To my mind, one of Mazda’s strongest points Target for the End of System. To reduce exhaust gas emissions, we are developing FY2005 is the interior design. Especially the cockpit is engine combustion improvements and catalytic technologies. 80 very user-friendly and neatly arranged. We are extending our adherence to the SU-LEV emissions level Mazda has always cared about the eco Mr. Horst 58.1 (75% lower than the 2005 exhaust emissions standards) which is friendliness of their cars. Consumption and Michutta 60 75.1 currently the most stringent exhaust emissions level in Japan. All exhaust emission were always on a good level. Mazda6 driver in Germany versions of the new Mazda MPV, launched in February 2006, have Also, I would like to see Mazda pursue their received this certification. (For details, see pages 27–28 of the 40 71.6 development in terms of design and safety. section entitled Mazda and the Global Environment). As a result, in FY2005 the ratio of Mazda passenger vehicles 20 30.2 produced for domestic sale that have earned SU-LEV status 17.2 reached 75.1%. Furthermore, we achieved our FY2005 target, 0 Scope FY2005 Target FY2005 Result which was to achieve a 90% ratio of passenger vehicles that met 2003 2004 2005 (FY) Improved fuel economy Japan—Achieve the 2010 fuel The 2010 fuel efficiency standards were achieved for all passenger either the SU-LEV or the U-LEV standards. SU-LEV: 75% lower than 2005 exhaust emissions standards efficiency standards for all weight vehicles except for the 1.5-ton passenger vehicle class. (reduced CO2 emissions). U-LEV: 50% lower than 2005 exhaust emissions standards or classes of passenger vehicles. Also, in the first quarter of FY2006 (April-June of 2006), our ratio 75% lower than 2000 exhaust emission standards of SU-LEVs (excluding OEM vehicles) rose to 94%-the highest level in the industry. Improved Fuel Economy A Representative Sample of Mazda’s SU-LEVs (Reduced CO2 Emissions)

Working toward 2010 Fuel Efficiency Standards Average Fuel Efficiency of Passenger Cars, by Weight Class As part of our efforts to reduce the amount of CO2 in vehicle Average fuel efficiency (km/ℓ) emissions, Mazda is working to improve fuel efficiency. In 25 FY2005, we achieved the 2010 standards for all weight classes of 20.69 passenger vehicles except the 1.5 ton passenger vehicle class. 21.2 20 18.31 18.8 All-new Mazda MPV Demio (Mazda2) Mazdaspeed Atenza (Mazdaspeed6) 17.9 17.80 16.0 15 12.61 13.0

11.08 10.5 10 10.20 8.9 2010 fuel efficiency standards 0 2001 2002 2003*1 2004*2 2005 *3 2010 (FY)

Weight class (kg) 750875 1,000 1,250 1,500 1,750 2,000 Axera (Mazda3) Verisa Premacy (Mazda5) *1 The 1000kg weight class was removed in FY2003 *2 Includes micro-mini from FY2004. 3 No vehicles were in the 750 kg weight class in FY2005. * Some Axela, Atenzaand Premacy models do not meet SU-LEV standards. *

67 Social & Environmental Report 2006 Social & Environmental Report 2006 68 FY2005 Performance Report Product Development and Research and Development

Reducing exhaust emissions and improving fuel efficiency is paramount to developing and launching environmentally friendly vehicles. To this end, Mazda is accelerating its R&D projects, including work on new energy sources, materials and recycling methods.

Scope FY2005 Target FY2005 Result Developing a Clean Diesel Engine Close-up Compared to gasoline engines, diesel engines are more In Japan, the SU-LEV standard was achieved in the Mazda MPV, Premacy The Mazda6 with our Clean Diesel Engine Japan—Gain SU-LEV/U-LEV approval (Mazda5), Demio (Mazda2), Atenza (Mazda6), Verisa and Axela(Mazda3). fuel-efficient, have higher output and emit less CO2. At the Proves Popular in Europe Cleaner exhaust emissions for 90% of its passenger cars by the Mazda achieved the standard for 92.3% for passenger vehicles (75.1% same time, they present problems in terms of nitrous oxide end of 2005. for SU-LEV and 17.2% for U-LEV). (NOx) and particulate matter emissions. Technologies to reduce The Mazda6, mounted with the MZR-CD, Mazda’s independently these emissions have been developed, however, and in recent developed diesel engine, went on sale in 2002. Winning Car of the years diesel engines have become popular environmentally Year awards in various countries, friendly vehicles, particularly in Europe. the model has enjoyed critical Cleaner Exhaust Emissions By incorporating post-combustion technologies, such as a acclaim in Europe, where diesel diesel particulate filter, in our efficient common-rail vehicles are particularly popular. direct-injection turbo diesel engine, Mazda has succeeded in Working Toward Increased SU-LEV Status: 94% SU-LEV Proportion of Vehicles Achieving Low-Emissions Vehicle creating a clean diesel-engine vehicle that exceeds Europe’s Personal Message Status, Excluding OEM Vehicles (SU-LEVs and U-LEVs) Mazda is actively promoting the development of technologies that Euro4 emissions standards. This engine is mounted in the Good level of fuel efficiency and allow its models to meet the standards set under the Japan Ministry Mazda3, Mazda5 and Mazda6 models, as well as in the Bongo (%) emissions technologies of Land, Infrastructure and Transport’s Emissions Gas Approval 100 and the Titan Dash, which are sold in Japan. To my mind, one of Mazda’s strongest points Target for the End of System. To reduce exhaust gas emissions, we are developing FY2005 is the interior design. Especially the cockpit is engine combustion improvements and catalytic technologies. 80 very user-friendly and neatly arranged. We are extending our adherence to the SU-LEV emissions level Mazda has always cared about the eco Mr. Horst 58.1 (75% lower than the 2005 exhaust emissions standards) which is friendliness of their cars. Consumption and Michutta 60 75.1 currently the most stringent exhaust emissions level in Japan. All exhaust emission were always on a good level. Mazda6 driver in Germany versions of the new Mazda MPV, launched in February 2006, have Also, I would like to see Mazda pursue their received this certification. (For details, see pages 27–28 of the 40 71.6 development in terms of design and safety. section entitled Mazda and the Global Environment). As a result, in FY2005 the ratio of Mazda passenger vehicles 20 30.2 produced for domestic sale that have earned SU-LEV status 17.2 reached 75.1%. Furthermore, we achieved our FY2005 target, 0 Scope FY2005 Target FY2005 Result which was to achieve a 90% ratio of passenger vehicles that met 2003 2004 2005 (FY) Improved fuel economy Japan—Achieve the 2010 fuel The 2010 fuel efficiency standards were achieved for all passenger either the SU-LEV or the U-LEV standards. SU-LEV: 75% lower than 2005 exhaust emissions standards efficiency standards for all weight vehicles except for the 1.5-ton passenger vehicle class. (reduced CO2 emissions). U-LEV: 50% lower than 2005 exhaust emissions standards or classes of passenger vehicles. Also, in the first quarter of FY2006 (April-June of 2006), our ratio 75% lower than 2000 exhaust emission standards of SU-LEVs (excluding OEM vehicles) rose to 94%-the highest level in the industry. Improved Fuel Economy A Representative Sample of Mazda’s SU-LEVs (Reduced CO2 Emissions)

Working toward 2010 Fuel Efficiency Standards Average Fuel Efficiency of Passenger Cars, by Weight Class As part of our efforts to reduce the amount of CO2 in vehicle Average fuel efficiency (km/ℓ) emissions, Mazda is working to improve fuel efficiency. In 25 FY2005, we achieved the 2010 standards for all weight classes of 20.69 passenger vehicles except the 1.5 ton passenger vehicle class. 21.2 20 18.31 18.8 All-new Mazda MPV Demio (Mazda2) Mazdaspeed Atenza (Mazdaspeed6) 17.9 17.80 16.0 15 12.61 13.0

11.08 10.5 10 10.20 8.9 2010 fuel efficiency standards 0 2001 2002 2003*1 2004*2 2005 *3 2010 (FY)

Weight class (kg) 750875 1,000 1,250 1,500 1,750 2,000 Axera (Mazda3) Verisa Premacy (Mazda5) *1 The 1000kg weight class was removed in FY2003 *2 Includes micro-mini from FY2004. 3 No vehicles were in the 750 kg weight class in FY2005. * Some Axela, Atenzaand Premacy models do not meet SU-LEV standards. *

67 Social & Environmental Report 2006 Social & Environmental Report 2006 68 FY2005 Performance Report Product Development and Research and Development

Advances to the MZR Engine Close-up The MZR 1.3L/1.5L engine that is used in the new Mazda2 Development of The Smart Vehicle Weight Reduction Substantially Improved Fuel Idling Stop System features low mechanical resistance, an exhaust gas recirculation Efficiency on the Mazda2 (EGR) cooler, an electrical throttle to increase EGR volume, an electrical charge/discharge control that recovers some The Demio (Mazda2), which was released in April 2005 An Advanced New Form of Idle-stop System Progress in Minimizing Vehicle Weight deceleration energy, and reduced engine revolutions when idling. following minor changes, features a host of improvements. All An idling-stop system saves fuel by automatically shutting down Meeting the demands for vehicles that offer better passenger Fuel consumption was reduced significantly by these measures. models, including the 1.5L e-4WD*, attained +5% on 2010 fuel the engine when the vehicle is stationary (waiting at a traffic light, safety features and are cleaner tends to cause an increase in The MZR 2.3L DISI TURBO, the new 2.3L direct-injection efficiency standards. The 1.3L four-speed automatic for example) and restarting it when the driver wishes to pull away. vehicle weight. At the same time, more weight affects a gasoline turbocharged engine that is mounted in the transmission model saw 10-15 mode fuel efficiency improved A conventional idle-stop system uses an electric motor to vehicle’s basic ability , driving, cornering and braking effectively. Mazdaspeed Atenza (Mazdaspeed6), features a compression by 9%, and the 1.3L FWD model (with the five-speed manual restart the engine. However, Mazda recently devised a new, more In short, heavier vehicles have less of that Zoom-Zoom spirit ratio of 9.5, unusually high for a turbocharged engine, and transmission or the four-speed automatic transmission) efficient means of performing this operation. Known as the Smart that goes into all our cars. Mazda therefore takes several greatly improved resistance to knocking at low and medium achieved +20% on 2010 fuel efficiency standards. Idling Stop System, it injects fuel directly into the engine’s approaches to making lighter vehicles. engine speeds. As a result, medium and low-end torque is Furthermore, all models continue to attain the highest cylinders while the vehicle is stationary and ignites the fuel to From the very beginning of development of the new excellent, it is extremely responsive, and fuel consumption is standards, holding SU-LEV status. create downward piston force that serves to start the engine. generation Mazda MX-5 (Roadster), which was launched in low—achieving +5% on 2010 fuel efficiency standards. * Electrical 4WD system The direct-injection-based Smart Idling Stop System not only August 2005, we set a target vehicle weight of 1,128 kg. The saves fuel; since it does not use an electric motor, but it also entire development team focused on making the car lighter in restarts the engine more quickly and quietly than a conventional 16 areas. For example, the gross weight of the body-in-white idle-stop system. (car body before coating and equipment are added) is 247.5 kg, 1.6 kg less than on previous models. At the same time, to Technologies and Benefits make the body more rigid we used ultra-high-tensile and Reverse Engine Operaton for Restart high-tensile steel and employed advanced analysis techniques The system injects a small amount of fuel into the cylinder whose to improve flexural rigidity 22% and torsional rigidity 47% piston is part-way through its compression stroke. The system compared to the previous model. We also examined every ignites this small amount of fuel, causing the engine to run nook and cranny of the Mazda MX-5, shaving off weight slightly in reverse. Then the system injects fuel into the cylinder wherever possible, even if only a few grams. Through this that has begun its compression stroke in the reverse direction. “gram strategy,” we successfully kept the weight down to only Finally, the system ignites this fuel, causing powerful expansion 1,090 kg (MX-5 model for sale in Japan, with five-speed the drives the engine forward to resume normal running. manual or variable six-speed manual transmission). Personal Message Piston-Position Control during Engine Shut down Helping to prevent global warming Achieving the counter-rotation described above requires the Weight savings in engine and front suspension by improving fuel efficiency engine to be controlled with a high degree of accuracy. The on our best selling car system effects precise control over the piston positions during Bracket-less mounting of Plastic cylinder-head cover (–1.3 kg) power-steering pump and Advances in Automatic Transmissions I think the fuel efficiency improvements engine shutdown. air conditioner compressor (–3.2 kg) In addition to previously available features like slip control and on the Mazda2, which is one of Mazda’s Benefits of the Smart Idling Stop System Plastic intake manifold (–2.4 kg) low-speed lockup control, the new Mazda6 employs a recently best-selling models, will go a long way Norio As this simple mechanism uses no motor, it has the high developed five-speed automatic transmission. This toward preventing global warming. Minato reliability necessary for frequent restarts. transmission helps keep engine RPMs down, reducing fuel While improving fuel consumption Program General substantially, the new Mazda2 is also Manager consumption and contributing to a quieter ride. Program Management System operation practical. My development team is Office No. 4 extremely proud of the vehicle. I hope Beginning of Reverse Start of engine restart operation forward you’ll have a chance to take a test drive operation Hollow stabilizer and experience the ride for yourself. Compression- Expansion- Compression- Expansion- Compression- Expansion- (–2.4 kg) Aluminum cylinder block stroke stroke stroke stroke stroke stroke (–5.4 kg) cylinder cylinder cylinder cylinder cylinder cylinder Aluminum suspension Fuel Efficiency of the Mazda2 upper arm (–1.3 kg) Initially Aluminum suspension 2010 Fuel equal lower arm (–2.3 kg) EngineDrive system Transmission Efficiency Standards in-cylinder air volumes Achieved +20% FWD 5MT,4AT on the standards 1.3L Achieved +10% e-4WD 4AT on the standards Fuel is injected into Ignition of fuel in Ignition of fuel in Achieved +10% the compression- compression-stroke expansion-stroke FWD 5MT,4AT on the standards stroke cylinder cylinder causes reverse cylinder causes forward 1.5L Achieved +5% rotation rotation that results in e-4WD 4AT on the standards engine restart. Reverse operation Forward operation

69 Social & Environmental Report 2006 Social & Environmental Report 2006 70 FY2005 Performance Report Product Development and Research and Development

Advances to the MZR Engine Close-up The MZR 1.3L/1.5L engine that is used in the new Mazda2 Development of The Smart Vehicle Weight Reduction Substantially Improved Fuel Idling Stop System features low mechanical resistance, an exhaust gas recirculation Efficiency on the Mazda2 (EGR) cooler, an electrical throttle to increase EGR volume, an electrical charge/discharge control that recovers some The Demio (Mazda2), which was released in April 2005 An Advanced New Form of Idle-stop System Progress in Minimizing Vehicle Weight deceleration energy, and reduced engine revolutions when idling. following minor changes, features a host of improvements. All An idling-stop system saves fuel by automatically shutting down Meeting the demands for vehicles that offer better passenger Fuel consumption was reduced significantly by these measures. models, including the 1.5L e-4WD*, attained +5% on 2010 fuel the engine when the vehicle is stationary (waiting at a traffic light, safety features and are cleaner tends to cause an increase in The MZR 2.3L DISI TURBO, the new 2.3L direct-injection efficiency standards. The 1.3L four-speed automatic for example) and restarting it when the driver wishes to pull away. vehicle weight. At the same time, more weight affects a gasoline turbocharged engine that is mounted in the transmission model saw 10-15 mode fuel efficiency improved A conventional idle-stop system uses an electric motor to vehicle’s basic ability , driving, cornering and braking effectively. Mazdaspeed Atenza (Mazdaspeed6), features a compression by 9%, and the 1.3L FWD model (with the five-speed manual restart the engine. However, Mazda recently devised a new, more In short, heavier vehicles have less of that Zoom-Zoom spirit ratio of 9.5, unusually high for a turbocharged engine, and transmission or the four-speed automatic transmission) efficient means of performing this operation. Known as the Smart that goes into all our cars. Mazda therefore takes several greatly improved resistance to knocking at low and medium achieved +20% on 2010 fuel efficiency standards. Idling Stop System, it injects fuel directly into the engine’s approaches to making lighter vehicles. engine speeds. As a result, medium and low-end torque is Furthermore, all models continue to attain the highest cylinders while the vehicle is stationary and ignites the fuel to From the very beginning of development of the new excellent, it is extremely responsive, and fuel consumption is standards, holding SU-LEV status. create downward piston force that serves to start the engine. generation Mazda MX-5 (Roadster), which was launched in low—achieving +5% on 2010 fuel efficiency standards. * Electrical 4WD system The direct-injection-based Smart Idling Stop System not only August 2005, we set a target vehicle weight of 1,128 kg. The saves fuel; since it does not use an electric motor, but it also entire development team focused on making the car lighter in restarts the engine more quickly and quietly than a conventional 16 areas. For example, the gross weight of the body-in-white idle-stop system. (car body before coating and equipment are added) is 247.5 kg, 1.6 kg less than on previous models. At the same time, to Technologies and Benefits make the body more rigid we used ultra-high-tensile and Reverse Engine Operaton for Restart high-tensile steel and employed advanced analysis techniques The system injects a small amount of fuel into the cylinder whose to improve flexural rigidity 22% and torsional rigidity 47% piston is part-way through its compression stroke. The system compared to the previous model. We also examined every ignites this small amount of fuel, causing the engine to run nook and cranny of the Mazda MX-5, shaving off weight slightly in reverse. Then the system injects fuel into the cylinder wherever possible, even if only a few grams. Through this that has begun its compression stroke in the reverse direction. “gram strategy,” we successfully kept the weight down to only Finally, the system ignites this fuel, causing powerful expansion 1,090 kg (MX-5 model for sale in Japan, with five-speed the drives the engine forward to resume normal running. manual or variable six-speed manual transmission). Personal Message Piston-Position Control during Engine Shut down Helping to prevent global warming Achieving the counter-rotation described above requires the Weight savings in engine and front suspension by improving fuel efficiency engine to be controlled with a high degree of accuracy. The on our best selling car system effects precise control over the piston positions during Bracket-less mounting of Plastic cylinder-head cover (–1.3 kg) power-steering pump and Advances in Automatic Transmissions I think the fuel efficiency improvements engine shutdown. air conditioner compressor (–3.2 kg) In addition to previously available features like slip control and on the Mazda2, which is one of Mazda’s Benefits of the Smart Idling Stop System Plastic intake manifold (–2.4 kg) low-speed lockup control, the new Mazda6 employs a recently best-selling models, will go a long way Norio As this simple mechanism uses no motor, it has the high developed five-speed automatic transmission. This toward preventing global warming. Minato reliability necessary for frequent restarts. transmission helps keep engine RPMs down, reducing fuel While improving fuel consumption Program General substantially, the new Mazda2 is also Manager consumption and contributing to a quieter ride. Program Management System operation practical. My development team is Office No. 4 extremely proud of the vehicle. I hope Beginning of Reverse Start of engine restart operation forward you’ll have a chance to take a test drive operation Hollow stabilizer and experience the ride for yourself. Compression- Expansion- Compression- Expansion- Compression- Expansion- (–2.4 kg) Aluminum cylinder block stroke stroke stroke stroke stroke stroke (–5.4 kg) cylinder cylinder cylinder cylinder cylinder cylinder Aluminum suspension Fuel Efficiency of the Mazda2 upper arm (–1.3 kg) Initially Aluminum suspension 2010 Fuel equal lower arm (–2.3 kg) EngineDrive system Transmission Efficiency Standards in-cylinder air volumes Achieved +20% FWD 5MT,4AT on the standards 1.3L Achieved +10% e-4WD 4AT on the standards Fuel is injected into Ignition of fuel in Ignition of fuel in Achieved +10% the compression- compression-stroke expansion-stroke FWD 5MT,4AT on the standards stroke cylinder cylinder causes reverse cylinder causes forward 1.5L Achieved +5% rotation rotation that results in e-4WD 4AT on the standards engine restart. Reverse operation Forward operation

69 Social & Environmental Report 2006 Social & Environmental Report 2006 70 FY2005 Performance Report Product Development and Research and Development

The Premacy Hydrogen RE Hybrid Scope FY2005 Target FY2005 Result The premacy Hydrogen RE Hybrid was displayed as a Hybrid Electric Car Development Development of alternative To commence leasing of vehicles In February 2006, Mazda commenced lease sales of the world’s first reference exhibit at the 39th Tokyo Motor Show, held in fuel vehicles with hydrogen rotary engines. hydrogen rotary engine cars, the RX-8 Hydrogen RE, and delivered one vehicle each to two energy-related companies. October 2005. This concept car employs a dual fuel system—a hydrogen rotary engine that can run on either hydrogen or Mazda is developing a hybrid car that combines a gasoline gasoline—and a hybrid system. engine with an electric motor. Using a front-engine, front wheel drive layout, the hydrogen Currently, we are collaborating with Ford on the development Developing Hydrogen Rotary Engine rotary engine and hybrid unit sit side by side at the front of the of the Tribute Hybrid. The Tribute Hybrid debuted as a reference Vehicles vehicle. A high-voltage battery is located below the second-row exhibit at the 39th Tokyo Motor Show in October 2005. seats, and a high-pressure hydrogen tank takes the place of By installing an MZR 2.3L engine with a hybrid system— Leasing Commences for the RX-8 Hydrogen RE Mazda RX-8 Hydrogen RE Major Specifications the third-row seats. In this efficient package, the hydrogen which delivers power and smooth acceleration on a par with a Hydrogen is being heralded as the fuel of the future for rotary engine and hybrid system’s superb environmental 3.0 liter V6 engine—we have succeeded in improving fuel clean-energy environmentally friendly cars. To capture the Model leased to Idemitsu Kosan Co., Ltd. performance and fun-to-drive character is combined with a efficiency for city driving by 74% compared with the base performance inherent in an internal combustion engine while spacious interior. model. The vehicle achieves superb environmental providing excellent environmental performance, Mazda is fusing performance and the Zoom-Zoom driving experience at the its hydrogen-based technologies with its latest generation same time. RENESIS rotary engine to develop a hydrogen rotary engine. In February 2006, we delivered 10 Tribute Hybrid vehicles to The hydrogen rotary engine delivers superb environmental the Orange County Fire Authority in California, USA. performance, as CO2 emissions are zero and NOx emissions are minimal. We were able to keep costs down to a practical level by using existing engine parts and production facilities, which also helped assure high reliability. In FY2005, we began commercial leasing of the RX-8 Hydrogen RE, delivering one model each to two energy-related companies. We plan to improve the performance of the Model leased to Iwatani hydrogen rotary engine vehicle based on the feedback we International Corporation receive from the drivers of these first hydrogen vehicles. We Base model Mazda5 () plan to continue developments in this field, working toward a Overall length, more environmentally friendly society through hydrogen-based Overall width, 4,505mm/1,745mm/1,615mm Overall height energy. (For details, see pages 23–26 of the section entitled Mazda and the Global Environment). Wheelbase 2,750mm Base engine RENESIS hydrogen rotary engine (dual fuel system) Developing Biofuel Vehicles Motor AC synchronous motor; max. output: 30 kW (40 PS)

Battery Nickel hydrogen battery

Fuel used Hydrogen or gasoline Mazda is working on the development of vehicles that run on Seating capacity 5 adults Base model Mazda RX-8 biofuels, which are potentially sustainable alternatives to fossil fuels. In Europe, sales have already commenced of vehicles Overall length, Overall width, 4,435mm/1,770mm/1,340mm that run on B5 fuel—a blend of 95% conventional diesel and Overall height 5% biomass fuels. Furthermore, in pushing the envelope of Wheelbase 2,700mm alternative fuel technologies, we plan to develop alternative-fuel Base engine RENESIS hydrogen rotary engine with dual-fuel system) vehicles that can use ethanol mixtures and GTL/BTL* as fuel.

Maximum output Hydrogen mode: 80 kW (109 PS) GTL is an acronym for gas-to-liquid fuel, which is created from natural gas. (NET) Gasoline mode: 154 kW (210 PS) * BTL refers to biomass-to-liquid fuels, which are created by liquidizing the gas that is emitted from biomass. Maximum torque Hydrogen mode: 140 N·m (14.3 kg m) (NET) Gasoline mode: 222 N·m (22.6 kg m) High-voltage battery under the second-row seat Vehicle weight 1,460kg

Seating capacity 4 adults

Fuels Hydrogen and gasoline

Driving range Hydrogen mode: 100 km (10-15 mode) Gasoline mode: 549 km High-pressure Mazda3 hydrogen tank replaces (diesel model) Standard lease 420,000 yen/month (including consumption tax) price* the third-row seats * The monthly lease price is based on a 30-month lease period.

71 Social & Environmental Report 2006 Social & Environmental Report 2006 72 FY2005 Performance Report Product Development and Research and Development

The Premacy Hydrogen RE Hybrid Scope FY2005 Target FY2005 Result The premacy Hydrogen RE Hybrid was displayed as a Hybrid Electric Car Development Development of alternative To commence leasing of vehicles In February 2006, Mazda commenced lease sales of the world’s first reference exhibit at the 39th Tokyo Motor Show, held in fuel vehicles with hydrogen rotary engines. hydrogen rotary engine cars, the RX-8 Hydrogen RE, and delivered one vehicle each to two energy-related companies. October 2005. This concept car employs a dual fuel system—a hydrogen rotary engine that can run on either hydrogen or Mazda is developing a hybrid car that combines a gasoline gasoline—and a hybrid system. engine with an electric motor. Using a front-engine, front wheel drive layout, the hydrogen Currently, we are collaborating with Ford on the development Developing Hydrogen Rotary Engine rotary engine and hybrid unit sit side by side at the front of the of the Tribute Hybrid. The Tribute Hybrid debuted as a reference Vehicles vehicle. A high-voltage battery is located below the second-row exhibit at the 39th Tokyo Motor Show in October 2005. seats, and a high-pressure hydrogen tank takes the place of By installing an MZR 2.3L engine with a hybrid system— Leasing Commences for the RX-8 Hydrogen RE Mazda RX-8 Hydrogen RE Major Specifications the third-row seats. In this efficient package, the hydrogen which delivers power and smooth acceleration on a par with a Hydrogen is being heralded as the fuel of the future for rotary engine and hybrid system’s superb environmental 3.0 liter V6 engine—we have succeeded in improving fuel clean-energy environmentally friendly cars. To capture the Model leased to Idemitsu Kosan Co., Ltd. performance and fun-to-drive character is combined with a efficiency for city driving by 74% compared with the base performance inherent in an internal combustion engine while spacious interior. model. The vehicle achieves superb environmental providing excellent environmental performance, Mazda is fusing performance and the Zoom-Zoom driving experience at the its hydrogen-based technologies with its latest generation same time. RENESIS rotary engine to develop a hydrogen rotary engine. In February 2006, we delivered 10 Tribute Hybrid vehicles to The hydrogen rotary engine delivers superb environmental the Orange County Fire Authority in California, USA. performance, as CO2 emissions are zero and NOx emissions are minimal. We were able to keep costs down to a practical level by using existing engine parts and production facilities, which also helped assure high reliability. In FY2005, we began commercial leasing of the RX-8 Hydrogen RE, delivering one model each to two energy-related companies. We plan to improve the performance of the Model leased to Iwatani hydrogen rotary engine vehicle based on the feedback we International Corporation receive from the drivers of these first hydrogen vehicles. We Base model Mazda5 (Mazda Premacy) plan to continue developments in this field, working toward a Overall length, more environmentally friendly society through hydrogen-based Overall width, 4,505mm/1,745mm/1,615mm Overall height energy. (For details, see pages 23–26 of the section entitled Mazda and the Global Environment). Wheelbase 2,750mm Base engine RENESIS hydrogen rotary engine (dual fuel system) Developing Biofuel Vehicles Motor AC synchronous motor; max. output: 30 kW (40 PS)

Battery Nickel hydrogen battery

Fuel used Hydrogen or gasoline Mazda is working on the development of vehicles that run on Seating capacity 5 adults Base model Mazda RX-8 biofuels, which are potentially sustainable alternatives to fossil fuels. In Europe, sales have already commenced of vehicles Overall length, Overall width, 4,435mm/1,770mm/1,340mm that run on B5 fuel—a blend of 95% conventional diesel and Overall height 5% biomass fuels. Furthermore, in pushing the envelope of Wheelbase 2,700mm alternative fuel technologies, we plan to develop alternative-fuel Base engine RENESIS hydrogen rotary engine with dual-fuel system) vehicles that can use ethanol mixtures and GTL/BTL* as fuel.

Maximum output Hydrogen mode: 80 kW (109 PS) GTL is an acronym for gas-to-liquid fuel, which is created from natural gas. (NET) Gasoline mode: 154 kW (210 PS) * BTL refers to biomass-to-liquid fuels, which are created by liquidizing the gas that is emitted from biomass. Maximum torque Hydrogen mode: 140 N·m (14.3 kg m) (NET) Gasoline mode: 222 N·m (22.6 kg m) High-voltage battery under the second-row seat Vehicle weight 1,460kg

Seating capacity 4 adults

Fuels Hydrogen and gasoline

Driving range Hydrogen mode: 100 km (10-15 mode) Gasoline mode: 549 km High-pressure Mazda3 hydrogen tank replaces (diesel model) Standard lease 420,000 yen/month (including consumption tax) price* the third-row seats * The monthly lease price is based on a 30-month lease period.

71 Social & Environmental Report 2006 Social & Environmental Report 2006 72 FY2005 Performance Report Product Development and Research and Development

Close-up Scope FY2005 Targets FY2005 Results Use of a Thermoplastic Elastomer (TPO)* Attain a recyclability ratio of 90% or The new Mazda MPV and Mazda Roadster (MX-5) achieved a more in new models. recyclability ratio of 90% or more. in Automatic Transmission Gearshift Knobs

Expand application of proprietary Mazda collected 52,476 damaged bumpers from the marketplace for Mazda is pushing forward the development of automobile End-of-life Vehicle recycling bumper-to-bumper recycling (at the development stage). reuse as new car parts. interior parts that are made primarily of polypropylene (PP). This technology. Promote the development of bumper-to-bumper recycling technology. focus on the use of PP materials should simplify future material Develop basic technologies for A high strength and heat resistant bioplastic was developed thanks to a recycling. bioplastic materials. joint industry-government-academia project. As one example, we have begun developing TPOs, which are made mostly of PP, for use in automotive interiors. TPOs

offer excellent abrasion resistance and have a smooth surface Personal Message finish. We have begun using this material in the automatic Raising New Car Recyclability transmission gearshift knobs on the Mazda5 (Premacy) and To simplify recycling, we will use fewer different materials in our vehicles. MX-5 (Roadster). By using the materials that we have TPO: thermoplastic olefin. developed more widely in other vehicles, Over 90 Percent Recyclability Ratio Achieved Developing Bioplastics * such as for gearshift knobs and parking In general, approximately 80% by weight of end-of-life vehicles In May 2006, in collaboration with Details of Mazda’s thermoplastic elastomer (TPO) brake levers, we will reduce the number Masaaki (ELVs) can be recycled, usually parts made of steel, aluminum industry-academia-government of Hirsoshima Prefecture of material varieties. In this way, I hope to Onishi and other metals. The remaining 20% is mostly plastics and Mazda succeeded in developing the world’s first plant-derived work toward the creation of vehicles that Technical Research Center glass, which is shredded and sent to landfills. plastic (bioplastic) material suitable for use as automotive are simpler to recycle and contribute to Through the initiatives outlined below, Mazda has achieved interior parts. Properties of the plastic include sufficient strength creating a recycling–oriented society. recyclability ratios of over 90% for new cars launched after 2002. and heat resistance for injection molding and the necessary surface quality. (For details, see page 31 of the section entitled Mazda and The Global Environment). 1. Research into automobile design oriented towards dismantling and research into dismantling technologies Recycling Recovered Bumpers simplify the recovery of parts and materials for reuse. for New Cars 2. Research to reduce the number of different resins used, which make up a significant proportion of Automobile Number of Bumpers Collected (Japan) Shredder Residue (ASR), in order to make recycling easier. Recycling Used Plastic Bumpers Mazda’s dedicated research into recycling resin-based parts, (Number of bumpers) 60,000 especially large parts like bumpers, has produced impressive 52,476 results. 50,000 47,300 Since 1992, we have collected resin-based damaged 45,314 40,358 bumpers from dealerships and recycled them as vehicle 40,000 38,532 undercovers and other parts. One issue, however, is that prior 31,954 Examples of Improved Recyclability on the All-new MPV 30,000 to remolding the bumpers we have to remove the paint layer. Door module Rear console boxes 23,183 Working towards bumper to bumper recycling, since 2001 we 20,000 Modularization, allows simplification to use of PP Changes to adhesion method allows simple have been able to remove 99% of the paint, thereby expanding separation of PP and felt use to bumper reinforcement parts and grain-surfaced bumpers. 10,000 Automatic transmission gearshift knob 5,569 In 2003, Mazda began working with Satake Corporation, an 2,638 2,654 2,942 Use of a thermoplastic elastomer (TPO) 0 integrated grain processor, on a new process that uses an 1995’96 ’97 ’98 ’99 2000 ’01 ’02 ’03 ’04 2005 (FY) Instrument panel optical selection technology to remove 99.9% of the paint layer. Use of vibration adhesion to make With this process, recycled bumper plastic can be added to air duct dismantling easier new plastic to produce new bumpers that are nearly identical to non-recycled bumpers in strength and surface finish (necessary for high painting quality). We started bumper-to-bumper recycling on RX-8 models produced at the end of March 2005. In February 2006, we extended this activity to the all-new Mazda MPV. Details on bumper-to-bumper recycling PP: Polypropylene

Dashboard insulator B-pillar trim and lower trim All-new Mazda MPV with recycled bumpers Simplification of noise insulation and noise absorbing materials Changes to adhesion method allows sinple separation of PP and felt

73 Social & Environmental Report 2006 Social & Environmental Report 2006 74 FY2005 Performance Report Product Development and Research and Development

Close-up Scope FY2005 Targets FY2005 Results Use of a Thermoplastic Elastomer (TPO)* Attain a recyclability ratio of 90% or The new Mazda MPV and Mazda Roadster (MX-5) achieved a more in new models. recyclability ratio of 90% or more. in Automatic Transmission Gearshift Knobs

Expand application of proprietary Mazda collected 52,476 damaged bumpers from the marketplace for Mazda is pushing forward the development of automobile End-of-life Vehicle recycling bumper-to-bumper recycling (at the development stage). reuse as new car parts. interior parts that are made primarily of polypropylene (PP). This technology. Promote the development of bumper-to-bumper recycling technology. focus on the use of PP materials should simplify future material Develop basic technologies for A high strength and heat resistant bioplastic was developed thanks to a recycling. bioplastic materials. joint industry-government-academia project. As one example, we have begun developing TPOs, which are made mostly of PP, for use in automotive interiors. TPOs

offer excellent abrasion resistance and have a smooth surface Personal Message finish. We have begun using this material in the automatic Raising New Car Recyclability transmission gearshift knobs on the Mazda5 (Premacy) and To simplify recycling, we will use fewer different materials in our vehicles. MX-5 (Roadster). By using the materials that we have TPO: thermoplastic olefin. developed more widely in other vehicles, Over 90 Percent Recyclability Ratio Achieved Developing Bioplastics * such as for gearshift knobs and parking In general, approximately 80% by weight of end-of-life vehicles In May 2006, in collaboration with Details of Mazda’s thermoplastic elastomer (TPO) brake levers, we will reduce the number Masaaki (ELVs) can be recycled, usually parts made of steel, aluminum industry-academia-government of Hirsoshima Prefecture of material varieties. In this way, I hope to Onishi and other metals. The remaining 20% is mostly plastics and Mazda succeeded in developing the world’s first plant-derived work toward the creation of vehicles that Technical Research Center glass, which is shredded and sent to landfills. plastic (bioplastic) material suitable for use as automotive are simpler to recycle and contribute to Through the initiatives outlined below, Mazda has achieved interior parts. Properties of the plastic include sufficient strength creating a recycling–oriented society. recyclability ratios of over 90% for new cars launched after 2002. and heat resistance for injection molding and the necessary surface quality. (For details, see page 31 of the section entitled Mazda and The Global Environment). 1. Research into automobile design oriented towards dismantling and research into dismantling technologies Recycling Recovered Bumpers simplify the recovery of parts and materials for reuse. for New Cars 2. Research to reduce the number of different resins used, which make up a significant proportion of Automobile Number of Bumpers Collected (Japan) Shredder Residue (ASR), in order to make recycling easier. Recycling Used Plastic Bumpers Mazda’s dedicated research into recycling resin-based parts, (Number of bumpers) 60,000 especially large parts like bumpers, has produced impressive 52,476 results. 50,000 47,300 Since 1992, we have collected resin-based damaged 45,314 40,358 bumpers from dealerships and recycled them as vehicle 40,000 38,532 undercovers and other parts. One issue, however, is that prior 31,954 Examples of Improved Recyclability on the All-new MPV 30,000 to remolding the bumpers we have to remove the paint layer. Door module Rear console boxes 23,183 Working towards bumper to bumper recycling, since 2001 we 20,000 Modularization, allows simplification to use of PP Changes to adhesion method allows simple have been able to remove 99% of the paint, thereby expanding separation of PP and felt use to bumper reinforcement parts and grain-surfaced bumpers. 10,000 Automatic transmission gearshift knob 5,569 In 2003, Mazda began working with Satake Corporation, an 2,638 2,654 2,942 Use of a thermoplastic elastomer (TPO) 0 integrated grain processor, on a new process that uses an 1995’96 ’97 ’98 ’99 2000 ’01 ’02 ’03 ’04 2005 (FY) Instrument panel optical selection technology to remove 99.9% of the paint layer. Use of vibration adhesion to make With this process, recycled bumper plastic can be added to air duct dismantling easier new plastic to produce new bumpers that are nearly identical to non-recycled bumpers in strength and surface finish (necessary for high painting quality). We started bumper-to-bumper recycling on RX-8 models produced at the end of March 2005. In February 2006, we extended this activity to the all-new Mazda MPV. Details on bumper-to-bumper recycling PP: Polypropylene

Dashboard insulator B-pillar trim and lower trim All-new Mazda MPV with recycled bumpers Simplification of noise insulation and noise absorbing materials Changes to adhesion method allows sinple separation of PP and felt

73 Social & Environmental Report 2006 Social & Environmental Report 2006 74 FY2005 Performance Report Product Development and Research and Development

Reducing VOCs in Vehicle Cabins Reducing VOCs in Coating Processes Scope FY2005 Target FY2005 Result Mazda has been researching methods to eliminate the use of In cooperation with Nippon Paint Co., Ltd., Mazda has developed Meet Mazda’s voluntary standards The vehicle noise reduction level for all vehicles met Mazda’s voluntary malodorous and harmful chemicals, such as aldehydes, to a new electrodeposition coating (e-coating paint) process that Vehicle Noise reduction. for noise reduction, which are stricter standard figures. than the latest noise regulations. make cabin interiors more comfortable. Concurrently, we also simultaneously reduces VOC and CO2 emissions. have developed a deodorizing air filter that can neutralize E-coating involves immersing parts into a special paint which aldehydes. From 1999, this filter has been available as standard adheres to the metal surfaces when an electric current is applied. Reduced noise from air Reduced noise from engine or as an option on our major vehicle models. We have also This process coats both the inside and outside surfaces, forming a Reducing Vehicle Noise intake system · Highly rigid cylinder block reviewed the use of interior materials and adhesives, so that we reliable barrier against rust. · Larger capacity air cleaner · Optimization of cam profile can lower the level of VOCs that are emitted in new-car interiors. Electrodeposition coating is common practice throughout the · Additional air intake resonator / · More rigid front cover increased capacity In FY2005, we began using a low-VOC bodyshell sealant. automotive industry. Most of the noise a vehicle makes comes from the engine, We are also developing Mazda’s newly developed e-coating paint contains half the Sound insulating cover exhaust system, air intake system, drive train and tires, so we on engine bay technologies for further VOC previous amount of VOCs and reduces the total volume of paint continually focus on noise reduction in these areas. We set reductions, enabling us to used, which further reduces VOC emissions in the painting voluntary noise standards that are more stringent than the most Low-noise comply with the VOC process. Reducing the total amount of paint also decreases the tires recent regulations, and we satisfy these levels in all our voluntary reduction targets set amount of CO2 emitted during paint production. In May 2005, we passenger cars and commercial vehicles. by the Japan Automobile began using this process at the Ujina No. 2 Plant, and have since New vehicles launched in FY2005, the Roadster and the Manufacturers Association, extended its application to all plants in Japan. Engine undercover made with Reduced noise from exhaust all-new MPV, also meet these voluntary standards. sound absorbing material system Inc., which will come into Mazda’s Three Layer Wet Paint System is a one-step painting · Large dual silencers effect from FY2007. process that applies three layers in succession— primer base and · Exhaust pipe sound insulating Deodorizing air filter with aldehyde clear coats. We have expanded our use of this innovative process cover removal function to all our plants in Japan, substantially reducing VOC and CO2 emissions. Employing these technologies in the painting process Scope FY2005 Targets FY2005 Results Winner of JSAE’ the Asahara Award of Merit raises Mazda’s environmental performance another notch. (For in Technology details, see pages 29–30 in the section entitled Mazda and the Use of lead was eliminated except for exempt parts. From the time she joined Mazda, Taeko Shimizu, Senior Global Environment.) Reduce the use of Reduce the number of parts which Use of mercury was eliminated except for exempt parts. environmental substances contains lead, mercury, hexavalent Use of hexavalent chromium in some parts was eliminated through Technical Specialist at Mazda’ s Technical Research Center, of concern. chromium or cadmium. development of a substitution technique. has conducted research on automobile exhaust emissions, Use of cadmium was eliminated except for exempt parts. cabin odors and harmful substances. Through her efforts, we The introduction of E-coating Technology Results in Several Advantages: A body sealer with reduced VOC emissions was adopted. introduced the Life Breath ingredient to cabin air filters, which Reduce amount of volatile Measures to lower VOC emissions were employed for some interior parts. Reduction in VOCs emitted in the e-coating painting organic compounds Promote cabin VOC reduction. removes aldehydes from the air A deodorizing filter with an aldehyde removal feature was offered as an process: 32 tons/year (VOCs) in cabin. in car cabins. This filter was option on core models. Reduction in CO2 released during the paint production introduced in major models in process: 8.8 tons/year 1999. Reduction of paint volume used, compared with previous In recognition of her ongoing method: 10% or more Reducing the Use of Hazardous Materials efforts over more than 30 More consistent paint layer all over the vehicle, contributing to more effective rust prevention. years, Ms. Shimizu won Asahara Award of Merit in Reducing the Use of Lead, Hexavalent Chromium, Reducing the Use of Air Conditioner Refrigerants Technology at the 56th Cadmium and Mercury Mazda is striving to reduce its use of CFC alternatives, which convention of the Society of Mazda is working on ways to reduce the amount of lead, contribute to the green house effect. At the same time, we are Automotive Engineers of hexavalent chromium, cadmium and mercury that it uses. developing air conditioner technologies to enable the use of Japan, Inc. (JSAE). For example, we have developed alternative technologies CO2 as a refrigerant, which has a relatively small impact on This award is presented to an individual that allow us to eliminate lead from all components except global warming. * JSAE member who has demonstrated significant dedication to the those exempt from regulations. We have already stopped using improvement and advancement of hexavalent chromium in some parts, and are presently automotive technologies over many Taeko Shimizu years, but whose achievements remain Senior Technical Specialist, relatively unknown. developing reliable alternative technologies so we can eliminate Technical Research Center its use in important safety components and their fixings.

Reduced VOC e-coating process

75 Social & Environmental Report 2006 Social & Environmental Report 2006 76 FY2005 Performance Report Product Development and Research and Development

Reducing VOCs in Vehicle Cabins Reducing VOCs in Coating Processes Scope FY2005 Target FY2005 Result Mazda has been researching methods to eliminate the use of In cooperation with Nippon Paint Co., Ltd., Mazda has developed Meet Mazda’s voluntary standards The vehicle noise reduction level for all vehicles met Mazda’s voluntary malodorous and harmful chemicals, such as aldehydes, to a new electrodeposition coating (e-coating paint) process that Vehicle Noise reduction. for noise reduction, which are stricter standard figures. than the latest noise regulations. make cabin interiors more comfortable. Concurrently, we also simultaneously reduces VOC and CO2 emissions. have developed a deodorizing air filter that can neutralize E-coating involves immersing parts into a special paint which aldehydes. From 1999, this filter has been available as standard adheres to the metal surfaces when an electric current is applied. Reduced noise from air Reduced noise from engine or as an option on our major vehicle models. We have also This process coats both the inside and outside surfaces, forming a Reducing Vehicle Noise intake system · Highly rigid cylinder block reviewed the use of interior materials and adhesives, so that we reliable barrier against rust. · Larger capacity air cleaner · Optimization of cam profile can lower the level of VOCs that are emitted in new-car interiors. Electrodeposition coating is common practice throughout the · Additional air intake resonator / · More rigid front cover increased capacity In FY2005, we began using a low-VOC bodyshell sealant. automotive industry. Most of the noise a vehicle makes comes from the engine, We are also developing Mazda’s newly developed e-coating paint contains half the Sound insulating cover exhaust system, air intake system, drive train and tires, so we on engine bay technologies for further VOC previous amount of VOCs and reduces the total volume of paint continually focus on noise reduction in these areas. We set reductions, enabling us to used, which further reduces VOC emissions in the painting voluntary noise standards that are more stringent than the most Low-noise comply with the VOC process. Reducing the total amount of paint also decreases the tires recent regulations, and we satisfy these levels in all our voluntary reduction targets set amount of CO2 emitted during paint production. In May 2005, we passenger cars and commercial vehicles. by the Japan Automobile began using this process at the Ujina No. 2 Plant, and have since New vehicles launched in FY2005, the Roadster and the Manufacturers Association, extended its application to all plants in Japan. Engine undercover made with Reduced noise from exhaust all-new MPV, also meet these voluntary standards. sound absorbing material system Inc., which will come into Mazda’s Three Layer Wet Paint System is a one-step painting · Large dual silencers effect from FY2007. process that applies three layers in succession— primer base and · Exhaust pipe sound insulating Deodorizing air filter with aldehyde clear coats. We have expanded our use of this innovative process cover removal function to all our plants in Japan, substantially reducing VOC and CO2 emissions. Employing these technologies in the painting process Scope FY2005 Targets FY2005 Results Winner of JSAE’ the Asahara Award of Merit raises Mazda’s environmental performance another notch. (For in Technology details, see pages 29–30 in the section entitled Mazda and the Use of lead was eliminated except for exempt parts. From the time she joined Mazda, Taeko Shimizu, Senior Global Environment.) Reduce the use of Reduce the number of parts which Use of mercury was eliminated except for exempt parts. environmental substances contains lead, mercury, hexavalent Use of hexavalent chromium in some parts was eliminated through Technical Specialist at Mazda’ s Technical Research Center, of concern. chromium or cadmium. development of a substitution technique. has conducted research on automobile exhaust emissions, Use of cadmium was eliminated except for exempt parts. cabin odors and harmful substances. Through her efforts, we The introduction of E-coating Technology Results in Several Advantages: A body sealer with reduced VOC emissions was adopted. introduced the Life Breath ingredient to cabin air filters, which Reduce amount of volatile Measures to lower VOC emissions were employed for some interior parts. Reduction in VOCs emitted in the e-coating painting organic compounds Promote cabin VOC reduction. removes aldehydes from the air A deodorizing filter with an aldehyde removal feature was offered as an process: 32 tons/year (VOCs) in cabin. in car cabins. This filter was option on core models. Reduction in CO2 released during the paint production introduced in major models in process: 8.8 tons/year 1999. Reduction of paint volume used, compared with previous In recognition of her ongoing method: 10% or more Reducing the Use of Hazardous Materials efforts over more than 30 More consistent paint layer all over the vehicle, contributing to more effective rust prevention. years, Ms. Shimizu won Asahara Award of Merit in Reducing the Use of Lead, Hexavalent Chromium, Reducing the Use of Air Conditioner Refrigerants Technology at the 56th Cadmium and Mercury Mazda is striving to reduce its use of CFC alternatives, which convention of the Society of Mazda is working on ways to reduce the amount of lead, contribute to the green house effect. At the same time, we are Automotive Engineers of hexavalent chromium, cadmium and mercury that it uses. developing air conditioner technologies to enable the use of Japan, Inc. (JSAE). For example, we have developed alternative technologies CO2 as a refrigerant, which has a relatively small impact on This award is presented to an individual that allow us to eliminate lead from all components except global warming. * JSAE member who has demonstrated significant dedication to the those exempt from regulations. We have already stopped using improvement and advancement of hexavalent chromium in some parts, and are presently automotive technologies over many Taeko Shimizu years, but whose achievements remain Senior Technical Specialist, relatively unknown. developing reliable alternative technologies so we can eliminate Technical Research Center its use in important safety components and their fixings.

Reduced VOC e-coating process

75 Social & Environmental Report 2006 Social & Environmental Report 2006 76 FY2005 Performance Report Reducing the Environmental Impact of Production

For manufacturers, production is clearly the process that has the greatest environmental impact. In addition to conserving energy, Mazda is working on minimizing its chemical emissions and waste, eradicating air pollution, and employing environmentally friendly measures in a number of areas.

Scope FY2005 Target FY2005 Result

Energy conservation Cut CO2 5% from emissions, (Prevention of global warming). compared with FY 1990. Achieved 24.2% cut in emissions compared to FY 1990.

Energy Consumption by Type Energy Conservation (Thousands of GJ/year) 2005 (Global Warming Prevention) 20012002 2003 2004 (FY) Electricity 4,342 4,970 5,176 5,344 6,045 Coke 397 341 386 386 433 Achieving a 24.2% Reduction in CO2 Emissions from the FY1990 level C heavy oil 1,247 1,252 1,181 1,126 1,238 Mazda is reducing energy consumption, working to achieve B heavy oil 0 0 0 0 0 self-imposed CO2 emission reduction targets for production A heavy oil 50 6 6 6 12 (non-consolidated) of 5% from FY1990 levels by the end of Gasoline 9 10 8 10 10 FY2005, and 10% by the end of FY2010. Kerosene 14 22 16 16 19 In FY2005, we increased our conversion to liquid natural gas Diesel 12 21 29 10 11 (LNG) fuel and began using the Three Layer Wet Paint System LPG 174 88 47 46 55 at all plants in Japan. We also forged ahead in our development LNG 441 728 821 874 1,078 of high frequency electric induction furnace and persevered to Total 6,686 7,438 7,670 7,818 8,901 develop and introduce other original energy conserving technologies. As a result of these efforts, on an unconsolidated (Thousands of GJ/year) basis our CO2 emissions from production in FY2005 were 9,000 reduced to 425,000 tons, or by 24.2% from the FY1990 level. 8,000

Production technologies to reduce environmental impact 7,000 friction heat aluminum joining technology / Semi-Dry Machining 6,000 Energy Conservation Initiative: Developing a Highly 5,000 Efficient Energy-Conserving Induction Furnace 4,000 0 At the FY2005 National competition for the superior 2001 2002 2003 2004 2005 (FY) energy-saving apprication example (hosted by the Energy LNG LPG Diesel Kerosene Gasoline A heavy oil Conservation Center, supported by Ministry of Economy, Trade B heavy oil C heavy oil Coke Electricity and Industry), Materials Group No.2, Powertrain Production Dept. No.3 won the Chugoku Bureau of Economy, Trade and

Industry Bureau Chief Award for its high frequency electric Unconsolidated CO2 Emissions from Production/CO2 induction furnace development. Emissions per 100 million yen of Sales Revenue By cutting the furnace and ladle heat losses on existing (Thousands of tons/year) (Tons per 100 million yen) fusing processes, we succeeded in reducing energy 900 30 requirements on a unit basis by 68% compared with 25.2 25.8 25.6 25.9 750 23.5 25 26.4 25.9 conventional production lines. 25.3 24.7 20.2 600 560 22.3 20 In the future, we plan 20.9 to use this theory as the 450 425 15 381 368 391 372 371 371 374 basis for further 342 337 362 energy-conserving 300 10 research into fusing 150 5 processes, and extend 0 0 the approach to other 1990 ’95 ’96 ’97 ’98 ’99 2000 ’01 ’02 ’03 ’04 ’05 fusing lines. (FY) Induction furnace CO2 emissions CO2 emissions per unit of sales

The principal coefficients used to compute CO2 emission volumes for production * processes are as follows. Electricity: 0.3813 kg of CO2/kWh; C heavy oil: 2.9393 kg of CO2/L; LNG (13A city gas): 1.9914 kg of CO2/Nm3. Other coefficients are based on the Implementation Plan Countermeasures Manual, published in 1999 in accordance with Section 1, Provision 8, of the Law concerning the Promotion of the Measures to Cope with Global Warming, and Voluntary Activity Plan Follow-up Methods, FY1999 edition.

77 Social & Environmental Report 2006 Scope FY2005 Targets FY2005 Results Reduce direct landfill waste to 1% or less (680 tons/year) of FY1990’s figure. Direct landfill waste was reduced to 0.5% (356 tons/year) of FY1990’s Reduction of direct Stop incineration and emit no figure. landfill waste incinerated ash by waste Stopped the incinerators as planned. reduction and promotion of recycling.

Reducing Waste

Working toward Zero Total Landfill Waste Reducing General Waste Mazda has gradually proceeded with “zero emissions” In addition to reducing industrial waste, we separate and initiatives to reduce landfill waste to zero. recycle the refuse from our offices, such as paper, empty cans First, by the end of FY2003 we intended to reduce direct and plastic containers to reduce the general waste volume. landfill waste from all production facilities in Japan—including For FY2006, we have set 300 tons or less as our target for our development, administrative and technical locations—to landfill waste. less than 5% of the FY1990 level. We achieved this goal one In the future, Mazda will strengthen its efforts toward the year ahead of the plan, in FY2002. ultimate target of zero emissions. We also plan to extend these In FY2003, we began working toward a second-stage goal: activities to other companies in the Mazda Group. reducing landfill waste to 1% or less against the same target by the end of FY2004. This objective was achieved in January Total Landfill Waste Volumes 2005. Expanding our activities, we are now working toward (%) our ultimate goal of completely eliminating total landfill waste 100 100 by FY2010.

77.0 80 Reducing and Recycling Byproducts and Waste 68.2 Our efforts to reduce landfill waste have two main thrusts: 59.6 reducing waste generation and promoting waste reuse and 60 57.6 recycling. 44.9 44.1 In FY2005, we substantially revised our waste emission rules 40 42.8 33.2 and increased waste separation efforts to further advance the 39.3 30.2 recycling of casting sand and plastics. As a result, the total 20 18.6 amount of direct landfill waste generated by Mazda on an 9.4 3.9 unconsolidated basis fell to 356 tons in FY2005, down 784 5.3 2.1 0 tons from the previous year. 1990 ’91 ’92 ’93 ’94 ’95 ’96 ’97 ’98 ’99 2000 ’01 ’02 ’03 ’04 ’05 We also began recycling waste that we previously had (FY) Comparison to 1990 level burned in our incinerator. In January 2006, we stopped using our incinerator altogether, reducing landfill from incineration ash to zero.

FY2005 Recycling of Manufacturing Byproducts and Waste Raw materials and energy

Products Plants Byproducts and waste In-plant recycling External recycling 100% · Scrap metal 50.4% · Casting sand 49.3% · Coal ash · Dust 50.7% 0.3% · Landfill waste Total recycling ratio: 99.7%

Social & Environmental Report 2006 78 Reducing Chemical Substance Emissions Eliminating Air Pollution

Advance Inspection System for Chemical Substances Mazda has defined its own standards for the emission of sulfur Prior to purchasing new raw materials for manufacture of oils, oxides (SOx), nitrous oxides (NOx), particulate matter, chemicals, paints and other types of secondary materials for finely-ground waste, and vapors, as well as hydrocarbons use in production processes, we evaluate their potential impact (HCs) and volatile organic compounds (VOCs). Our standards, on worker safety and the environment, based on the Material which are stricter than legally stipulated values, have prompted Safety Data Sheet (MSDS). us to introduce special removal and reduction equipment and If this screening uncovers any nonconformity of the material implement stringent daily controls. As a result, we are meeting to the standards, we eliminate or minimize its use and search our voluntary standards. resolutely for an alternative. For details, see the Site report on pages 87–90.

Pollutant Release and Transfer Register Efforts (PRTR) In FY2005, Mazda used a total of 23 substances that require Eliminating Sensory Pollution reporting according to the Pollutant Release and Transfer Register (PRTR). By introducing the Three Layer-Wet Paint System and improving our rate of recovery for thinners, we managed to reduce Even if they fall within legally prescribed levels, noise, vibration the release of PRTR designated materials into the atmosphere or and smells can cause distress among residents near our water system by 52% compared with the FY1998 level. This level, facilities. Recognizing this fact and seeking harmony with local 1,315 tons, also equates to a 5% reduction from the previous year. communities, Mazda will continue to step up its measures to In the future, we will persevere in our efforts to reduce reduce such irritants. emissions of PRTR substances. For details about complaints on noise, vibration and oder, For details, see the site report on pages 87–90. see Environmental incidents and complaints and compliance with environmental laws on page 64. Effective Use of Water and Prevention of Wastewater Contamination Other Environmental Measures

Mazda draws no subsurface water for industrial use, recognizing that this practice can lead to problems with ground subsidence. Mazda is implementing companywide measures to remove Instead, we receive a regular supply of water for industrial use. chlorine-based substances from the lubricants used in As part of our consideration for the effective use of water machining processes. resources, the Miyoshi Plant collects and stores rainwater. Conforming with the Law on Waste Processing and When releasing wastewater into public waterworks, Mazda Cleaning, Mazda stores the polychlorinated biphenyl (PCB) that follows voluntary standards that are stricter than legal is used as an insulator in condensers. requirements. We monitor wastewater levels on a daily basis to As of the end of FY2005, our stores were 457 units of PCB. be certain that water quality is maintained. To ensure wastewater cleanliness, we treat all water that is used for industrial processes, human hygiene and other purposes. Initiatives to Preserve the Natural Environment Outline of Wastewater Processing System (Hiroshima Plant) Human Human hygiene: waste Sterilization, Mazda’s Miyoshi Proving Ground is involved in a plan to restore toilets septic tank initial processing hand- of human waste the scenic beauty and resuscitate the flood control function of washing Wastewater processing facility an extensive forested area that was destroyed by pine weevils. Industrial Sub-wastewater Main wastewater Oil separation This plan calls for a 22-hectare plot of forest to be covered by Processes: storage tank storage tank Cooling water FY2007. At the end of FY2005, 16.8 hectares were complete. wastewater Wastewater transfer Wastewater transfer High-level from washing by pumps by pumps processing At our Kenbuchi Proving Ground we conduct tests to Biological Initial precipitation processing determine operational safety Rainwater storage tank in cold climates and perform Rainwater Coagulation Release Initial precipitation R&D. However, to curtail the pumps Release impact on the natural Waste liquids: Main wastewater coolant, storage tank environment, we minimize waste liquids R&D at this facility and limit from washing Vacuum truck Off-site processing testing to approximately 50 days during the winter. 79 Social & Environmental Report 2006 Miyoshi Proving Ground FY2005 Performance Report Reducing the Environmental Impact of Production

Holding Environmental Seminars for Suppliers Promoting Green Procurement Mazda holds environmental seminars for its suppliers. In FY2005, 400 suppliers participated in a seminar entitled “Mazda’sCSR.” Purchasing in Accordance with Green Procurement Guidelines Mazda has worked with suppliers for some time in environmental protection issues, and is committed to expanding purchasing in accordance with our Green Procurement Guidelines. In May 2005, we established the Green Procurement Guidelines to take our standards to the next level. These guidelines request that suppliers conform to the three items described below. Based on these guidelines, Mazda prioritizes purchases from suppliers that have created and operate environmental management systems, that comply with laws and regulations and that appropriately manage hazardous substances. Environmental seminar

Construct environmental management systems (ISO 14001 Using the IMDS to Assess Environmental Impact accreditation), By working with suppliers on green procurement, Mazda also Manage substances with environmental impact (IMDS entry, upgrades its own environmental management system. We observance of MES for management of substances with environmental impact), and comply with both the European regulations and the voluntary Designate a person responsible for environmental issues. standards set by the Japan Automobile Manufacturers Association on such substances as lead, mercury, cadmium and hexavalent chromium use. In addition, we appropriately manage Requiring ISO 14001 Certification among Suppliers our use of the 85 substances on the international Global As part of its Environmental Management System, Mazda requires Automotive Declarable Substance List (GADSL) that have been its suppliers of automobile parts and materials, as well as suppliers determined to have an environmental impact. These efforts of manufacturing facilities and equipment, to attain ISO 14001 include requesting information from suppliers indicating the accreditation, and Mazda works with suppliers to share presence of any of these controlled substances in their information and best practices to raise environmental awareness. automotive components. After determining content levels and As of the end of FY2005, 97% of our principal suppliers had implementing various measures, Mazda has been compliant with earned ISO 14001 certification. We will continue promoting these regulations since July 2003. accreditation, as well as supporting as-yet-uncertified small-scale To manage its use of substances that have an environmental suppliers in their efforts to create environmental management impact, and to promote efforts to reduce their use, Mazda uses systems. We have requested that even small-scale suppliers that IMDS* to assess substances for potential environmental are members of local cooperative associations for damage. Since November 2002, we have annually published our automotive-related companies set up either ISO 14001 or updated data on substances, parts and materials designated for EcoAction 21 environmental management systems. For such assessment, following the IMDS data entry guidelines. suppliers, we conduct Eco-Action 21 explanation meetings to IMDS is an acronym for International Material Data System, an international database on * materials. encourage them to attain the certification. Assessing Substances’ Environmental Impact Supplier Accreditation of ISO 14001 Mazda Supplier (%) 94 95 97 Assessment request 100 90

80

54 60 Data download Data input 40

20

0 2001 2002 2003 2004 2005 (FY) IMDS server

Progression of the ratio

Social & Environmental Report 2006 80 FY2005 Performance Report Reducing the Environmental Impact in Logistics Operations

Mazda is collaborating with logistics companies, dealers and other automobile manufacturers to minimize the environmental impact imposed by logistics when procuring parts and supplying finished products. This is being achieved by promoting modal shifts and reductions in packaging.

Scope FY2005 Target FY2005 Result

Prevention of global warming Cut 11% from CO2 emissions from logistics Achieved 12% cut from CO2 emissions from logistics operations (CO2 emissions reductions). operations compared to FY1999. compared to FY1999.

Cutting the Number of Truck Runs through Milk-Run Curtailing CO2 Emissions Caused Deliveries and Other Measures by Logistics Activities We introduced a full-scale milk-run system* (MRS) for the Kyushu region in FY2003. This was expanded to the Hiroshima Mazda is striving to identify the amount of CO2 emitted in its area and to Yamaguchi Prefecture during FY2005. These steps logistics activities and is furthering reductions through resulted in a cut of 2,411 tons from CO2 emissions compared increased efficiency, modal shifts and other measures. During with the previous fiscal year. FY2005, we exceeded our reduction target of 2,348 tons The term milk-run is used to refer to a single truck which cycles around multiple * suppliers collecting freight. The name is derived from the milk runs of farmers collecting resulting in slashing 3,306 tons from total CO2 emissions. milk from their dairy cows throughout the pasture. The newly established Mazda Green Plan 2010 targets cite reductions of 15% by 2010, compared with the FY1999 Utilizing Rail Transportation emissions levels. In overseas affiliates, we also plan to assess the For many years, Mazda has used rail container services to ship situation and to carry out management by objectives by FY2007. customer service* (CS) parts to parts dealerships in Sendai and We currently set year-on-year reduction targets for total Sapporo. In 2002, we switched shipment method to Chiba emissions. However, the total emission volume varies with from truck to rail container, boosting the proportion of domestic trends in production and shipment volumes, so in the future we customer service parts transported by rail to 15.5%. will establish reduction plans and targets based on energy Furthermore, by using rail transportation for the Tokai region source units for each distribution area. from March 2007, we plan to boost this ratio to 26%. We are also targeting the supply of parts to production

Cumulative CO2 Emission Reductions by Year facilities, switching 10% of transportation to the four prefectures of the Tokai region to rail from March 2006. By (tons) 20,000 15 March 2007, we plan to boost this figure to 35%. 12.3 Parts for replacement in purchased vehicles as a result of periodic inspections or * repairs. . 16,000 12 9.4 13,936

12,000 10,630 9

8,000 4.4 6 2.6 4,999 4,000 3 1 2,884 1,095 0 0 2001 2002 2003 2004 2005 (FY) Japan Railways containers

Cumulative reduction in CO2 emissions Reduction ratio of total emissions Improved Import and Export Routes Collaboration with logistics affiliates in environmental We now load and unload imports and exports through ports at protection activities both Hofu and Hiroshima. This has effectively cut truck runs from Hofu to Hiroshima and consequently reduced CO2 emissions by 363 tons.

Mazda Logistics System Suppliers Mazda Sea transportation for domestic transportation of finished vehicles Finished vehicles Pure car Distribution center Dealership Domestic customer carrier Supplier Increased transportation Finished vehicle pool Rail Ship efficiency between plants Overseas port Dealer Overseas customer

Ship KD distribution Ship Supplier KD pool Overseas port Overseas plant Plant Plant

Service parts distribution Parts dealership Dealership Domestic customer Supplier Base Parts center Ship Distributor Dealership Overseas customer

81 Social & Environmental Report 2006 Utilizing Sea Transportation Scope FY2005 Target FY2005 Result Mazda has capitalized on the location of facilities on the shores Reduce the consumption Reduced the consumption of the Seto Inland Sea to accelerate the modal shift towards sea Reduction of packaging and of packaging and transportation. Currently, 92% of domestic deliveries of finished in waste wrapping materials by wrapping materials by volume 19.1% (1,202 tons) from 20.5% (1,954 tons) from vehicles are by sea. We are also promoting cooperative sea the FY1999 level. the FY1999 level. transportation with other automobile manufacturers. During FY2005, we partially switched to sea from truck transportation of original equipment manufacturing* Reduction in Packaging and Wrapping (OEM) vehicles from Materials Nagoya to Chiba, recording a reduction of 51 Mazda carries out environmentally considerate packaging design tons in CO2 emissions. and materials procurement in its distribution operations. We have Production of another company’s introduced returnable containers as packaging materials for * brand transportation to offshore assembly plants and domestic and overseas parts sales companies. In addition, we are using reusable

Close-up materials and amending packing specifications. These initiatives fall Resolution and Authorization to Promote under the auspices of our 3R the Spread of Green Distribution Partnerships (returnable, reuse, and reduce) activities promotion. Two measures for Mazda’s distribution areas were proposed to During FY2005, we surpassed the Green Partnership (support for and promotion of measures our target of 1,202 tons to to reduce CO2 emissions in the distribution field through tie-ups achieve reductions of 1,954 tons and collaborations between shippers and distribution in packaging materials. Transport pallets made from recycled plastic companies). This resulted in a promotion resolution for FY2006 for operations to spread this partnership system, which was Reductions in Packaging and Wrapping Materials authorized by the Japan Ministry of Economy, Trade and (tons) Industry and the Ministry of Land, Infrastructure and Transport. 12,000 11,263 9,309 3,367 9,000 Personal Message 8,034 2,243 6,066 1,913 6,000 Working towards an Environmentally 1,648 2,958 6,345 7,164 Friendly Parts Shipping System 3,000 5,492 1,195 3,921 The introduction of the Mazda Milk Run 1,357 0 406 497 629 721 732 system has resolved the bottlenecks that 2001 2002 2003 2004 2005 (FY) used to occur when small-volume shippers Reuse Returnable Reduce were required to accumulate larger volumes Koji prior to shipment and has improved Tomita transport efficiency. Taking advantage of Parts Procurement Reducing Materials through Changes in Types of Packaging & Logistics Dept. the concentrated shipment volumes, we During FY2005, better consolidation of parts shipments improved proposed a project that shifted truck-based loading efficiency by 1% for parts shipped to China. The number of transportation to distribution by railways in containers was reduced by 88 and the quantity of materials used by the Tokai region to achieve a lower volume 85 tons. Moreover, have also introduced Simplified packing* for CS of CO emissions. 2 parts shipped to Europe. This method enables the parts placed in the In the future, we will work with our partner outer container more efficiently by simplifying packaging for smaller distribution operators to create parts cubic volume and stacking the parts within. By using this method, we transportation systems that are considerate succeeded in reducing the of the global environment. number of containers by 130 and the quantity of materials used by Electrification of Factory Transporters 122 tons. Mazda has switched its forklift trucks from gasoline-driven to The implementation of such lower-CO2-emissions electric models in its distribution warehouse measures raises load packing operations for CS parts and other stock. We are further promoting efficiency and cuts transportation conversion from forklifts to compact electric towing scooters. volumes. As a consequence, we Simplified packing: Bumper packaging Our fleet of electric vehicles had expanded to 111 units by the end reduced CO2 emissions by 481 materials were changed from cardboard of FY2005, which is 61% of the total. tons. boxes to kraft paper. This packaging method includes simplified individual packaging to be stacked with less * allowance and more compact packaging, resulting in more efficient alignment in an outer container. Social & Environmental Report 2006 82 FY2005 Performance Report Recycling End-of-life Vehicles

In order to conform to newly enacted laws and regulations, Mazda has established new recycling systems and routes, reinforced examination and research operations and bolstered its recycling ratio.

Recycling Performance for FY2005 Promotion of Recycling based on As outlined above, our recycling performance for the year the End-of-life Vehicle Recycling Law featured recyclablity ratios for both ASR and airbags above the legally stipulated standards. We shall continue in our ongoing Mazda has established formal treatment and recycling efforts to promote recycling. mechanisms for chlorofluorocarbons (CFCs), airbags and automobile shredder residue (ASR) in response to recycling and Status of Compliance with FY2005 Standards*1 other legal obligations arising from the End-of-life Vehicle Item Result Legal standard Recycling Law which was enacted on January 1, 2005 in Japan. ASR recycling 30% or more Furthermore, our sales companies are levying recycling fees ratio*2 63% (FY2005 – 2009) at the time of new car sales and periodic inspections to cover handling and appropriate processing of end-of-life vehicles Airbag recycling 3 93% 85% or more (ELVs) through a vehicle recycling system. ratio* * Automobile Shredder Residue (ASR): The plastic, glass, rubber and other residue that remains after metals have been separated and recovered from shredded car bodies *1 Based on the second clause of Article 25 of the End-of-life Vehicles Recycling Law Article *2 ASR recycling ratio combines the End-of-life Vehicles Recycling Law Article 28 ASR Recycling (Shredder dust processing) and Article 31 (total recyclability) 3 Airbag recycling ratio = Total quantity of recycled airbags/Total quantity of recovered Mazda jointly established ART* along with 12 companies, * airbags including Ford Motor Japan, Premier Automotive Group, and Mitsubishi. This consortium is dedicated to raising recycling Outline of Recycling and Other Data during FY2005 ratios and reducing processing costs based on legal Category Result compliance. Moreover, we are building an ELV recycling network Total quantity CFCs 42,110kg 129,516 through tie-ups with 203 companies with excellent recycling collected facilities and certified dismantling operators (as of May 2006). Number collected 10,511 During FY2005, we handled about 29,000 tons of ASR 32,404 Number processed 40,962 (equivalent to 168,000 vehicles), of which 18,000 tons was Airbags recycled. This represents an ASR recycling ratio of 63%, Quantity recycled 5,014.2kg significantly greater than the legally stipulated 30%. We are Quantity collected 51,473 committed to early attainment of the 2015 standard of 70%. ART: Automobile shredder residue Recycling promotion Team Total quantity of * ASR collected 26,176 tons 151,039 Total quantity CFC Collection and Disposal, Airbag Recycling ASR corresponding to fully 2,930 tons 16,796 utilized collected ASR Mazda and other automobile manufacturers and organizations Total quantity cooperatively formed Japan Auto Recycling Partnership collected 29,106 tons 167,835 to promote proper processing and recycling of CFCs and airbags. The CFCs from approximately 129,000 vehicles Total value of repaid deposits ¥1,272,994,825 (approximately 42,000 kg) were handled during FY2005 and Total costs of recycling, etc. ¥1,344,833,403 airbags from approximately 32,000 vehicles (approximately 51,000 units). This rendered a recycling ratio of 93%, far beyond the legally stipulated 85%. In addition, since 1999 Mazda has utilized an all-in-one operating and processing connector for airbags on all new model cars, which enables processing of ELVs without removal of airbags, and it is equipped in all of the currently available models.

End-of-life Vehicle (ELV) Recycling Process Recycling of recovered ASR

Crushing/ ASR Materials recycling facilities shredding Recycling Thermal recycling facilities ELV CFCs Dismantler facilities agent Incineration/landfill facilities ELV Collecting recovery agent agent Final owner (sales Appropriate company, CFC processing Recycling of fully utilized received materials etc.) recovery of airbags Eco-press Certified dismantler Full utilization recycling facilities Fine dismantling (electric furnaces, etc.)

* ELV: End-of-life Vehicle

83 Social & Environmental Report 2006 ART Organization

ART participating companies

Ford PAG Nissan Mitsubishi Daimler Specified Mazda Japan Import Nissan Diesel Subaru Mitsubishi Chrysler Consignment Truck & Bus Japan of recycling

ART Operating Committee (joint project) Activities by member companies Consignment of recycling Payment of recycling costs Auditing and training Planning of ASR recycling promotion Specifying collecting agent Establishing facilities to recycle materials Recycling facilities Specifying consortiums for full utilization companies Materials recycling facilities Thermal recycling facilities Full-utilization facilities Incineration/landfill facilities

Investigation and Research into ELV Recycling Technologies

Research Activities on Dismantling Use of Recycled Parts Mazda is involved in various areas of research to create Since 1996, Mazda has been collecting and renovating engines easy-to-recycle cars that ensure progression toward the Sound and automatic transmissions that have been replaced during Material-cycle Society of the future. repair work and selling them as rebuilt components. Moreover, Research into dismantling in cooperation with recycling in tie-ups with recycled parts suppliers, parts sales companies companies is one of such facet. We are promoting R&D into have been using the Internet for sale of such parts for reuse structures that facilitate simple dismantling and materials that (second-hand). enable easy recycling using information obtained from dismantling companies and the dismantlability of Mazda Major Rebuilt Parts products as feedback for product development. We integrate Rotary engines, reciprocating engines, automatic transmissions, this approach into our recycling planning. manual transmissions, power steering units

Rotary engine Reciprocating engine Dismantling research

Efforts for ELV Glass Recycling Major Reused Parts During FY2005, in cooperation with eight automobile General exterior parts, general electrical parts manufacturers* and Asahi Glass Co., Ltd., Mazda developed a recycling technology to reuse waste glass as a material for vehicle glass and other applications, and conducted corroborative research into distribution system maintenance. We plan to continue this line of research in the future. Mazda Motor Corporation, Isuzu Motors Ltd., Suzuki Motor Corporation, Nissan Motor * Co., Ltd., Nissan Diesel Motor Co., Ltd., Fuji Heavy Industries Ltd., Mitsubishi Motors Corporation, Mitsubishi Fuso Truck and Bus Corporation

Social & Environmental Report 2006 84 FY2005 Performance Report Efforts in Offices and at Dealerships

Mazda is conducting activities to raise awareness and supplying information to create a corporate climate conducive to aggressive environmental protection measures throughout its network of low-environmental-impact offices and dealerships. This is attained through establishment of individual measures and targets by these facilities.

Garbage separation is also strictly enforced in each office and at Environmental initiatives in Mazda’s Offices waste collection points as a measure to control waste generation.

Office Energy-saving Activities Participation in Team Minus 6% Mazda purchases eco-friendly and energy-saving OA In Japan Mazda is participating in Team Minus 6% and has equipment and appliances, and enforces a policy of switching created “Cool Biz” notice boards, endorsed with the Team off lighting and computing equipment when not in use, Minus 6% logo mark, which are placed in the reception areas including expanding its “Idling Stop” promotion activities. These of all offices. This initiative aims to raise customer awareness initiatives heighten the awareness of each employee to soften and deepen understanding of our Cool Biz promotion. the environmental impact of our operations. Team Minus 6% proposes six action plans, which target 55 During FY2005, we solicited sticker items, for implementation in the office (28 Items) and home (27 designs from all staff to supersede the items). A pamphlet distributed to all existing motif in a renewed sticker employees outlines concrete examples of campaign to reinforce awareness of applications for these directives, including Idling Stop activities. The stickers were raising awareness of global warming in distributed to a total of 45,000 current, the workplace as well as at home and former and Mazda group staff during everyday energy-saving measures. FY2006 to spearhead the New “Idling Stop” activities The Team Minus 6% campaign has company-wide promotional activities. sticker been extended to all the companies of the Mazda group located in the headquarters’ premises. Actions at Dealerships

Close-up Eco-Walk Commuting Program Actions at Dealerships In cooperation with the Mazda Dealership Association in Japan, Mazda has introduced an incentive system of reimbursement we launched Mazda’s Environment Care Approach 21 (MECA21) (1,500 yen per month) for employees who commute two in 2000, embracing actions and guidelines for autonomous kilometers or more and who opt to walk to work. This program has environmental activities by sales companies. We have the dual benefits of environmental protection and health promotion. strengthened the promotional system by making environmental efforts prerequisite for Personal Message dealership awards to sales Healthy Eco-Walk program companies. In FY2005, we I have been taking part in the Eco-Walk revised MECA21 to match new program since the end of January 2006. environmental legislation and to Every morning, it takes me about one define PDCA cycles. hour to walk from my house to the nearest station and from the Mukainada Tomoyuki Mazda Environment Care Approach 21: Actions and guidelines for autonomous * environmental activities by sales companies established in cooperation with the Mazda train station to the office. It feels great to Kobayashi Dealership Association in Japan. Career Development look at the scenery as I’m walking, and it Department makes me feel healthier, too. Mazda Technical College Support Tools for Environmental Measures by Dealerships Mazda distributes an action manual, the Mazda Excellent Office Waste Reduction Navigator, for sales Paper consumption in the office is a considerable contributor to and service staff at environmental impact, so Mazda is posting various internal sales outlets and a information on the Intranet and switching to electronic systems compilation of case for administrative paperwork and documentation, processing studies in and storage for accounting procedures in its drive to reduce environmental paper usage. compliance and Furthermore, used paper (paper shredder dust) is being improvement to utilized as cushioning materials in packaging for parts provide active transportation. We are making every effort to separate paper and support for MECA21 converting used paper as recycle paper to expand recycling. activities.

85 Social & Environmental Report 2006 FY2005 Performance Report Environmental Communications

Mazda publishes a Social and Environmental Report, maintains an Internet Website, hosts events and carries out other activities to promote awareness of its environmental measures and their outcomes. We strive to use various media and take every opportunity to publicize our environmental endeavors.

Diverse Communications Participation and Cooperation in Diverse Events

Education to Raise Environmental Awareness among Environmental Events Employees During FY2005, we participated in and cooperated with an Mazda utilizes the education via its Intranet and issues reports array of events, including Eco-Car World 2005 and the and the in-house magazine “My Mazda” to foster environmental Automotive Engineering Exposition in Japan. We used these awareness in all employees, including at subsidiaries and events to reinforce communications with the public and to affiliates. showcase our environmental efforts and our hydrogen rotary Further, as part of “Environment Month” held every year in engine vehicle, the RX-8 Hydrogen RE. June, employee awareness is fostered through broadcasting We participate in the Hiroshima Eco-Forum, which includes the President’s environment message internally, as well as such initiatives as hosting lectures on compliance with through regional environmental improvement activities. environmental laws, ISO14001 seminars, participating in international cooperation programs and providing support Disclosure through the Report and the Internet regional environmental studies. The Hofu Plant also conducts From 2001, Mazda started publishing an annual Environmental activities involving the Environmental ISO Yamaguchi Club. Report, which also reported social and economic facets of its operations since 2003. To mark this expansion of content, the publication was renamed the Social and Environmental Report in 2004. Furthermore, in addition to hosting information from the Social and Environmental Report, the Mazda Website provides data on ELVs (end-of-life vehicles) and other information.

Environmental Events at the Mazda Museum

Environment Exhibition at the Mazda Museum We hosted the second Environment Exhibition at the Mazda Museum from June 1 to 30, 2005. In addition to showcasing Eco-Car World 2005 actual parts, display panels, videos and other media were used to showcase such environmental technologies as the vehicle recycling process, the environmentally friendly Three Layer Wet Paint System, Mazda’s original bumper recycling system and newly developed bioplastics. By popular demand, we are currently planning future events.

Environment Exhibition at the Mazda Museum “Minna ga shuyaku no kankyo kyoiku” symposium (the People’s Environmental Education Symposium (in cooperation with the Chugoku Environment Net, an authorized NPO).

Social & Environmental Report 2006 86 Environmental Data

Site report: Hiroshima Region

Hiroshima Plant Miyoshi Office (including plant)

Address: 3-1 Shinchi, Fuchu-cho, Aki-gun, Hiroshima, Japan Address: 551-1 Higashi-sakaya-cho, Miyoshi-shi, Hiroshima, Japan Operations started: March 1931 Operation started: May, 1974 Major products: Passenger cars, trucks, engines, automobile manual Major product: Engines transmissions Employees: 158 (as of end of March 2006) Employees: 15,118 (as of end of March 2006) ISO14001 certification: June 2000 ISO14001 certification: June 2000 Site area (floorspace): 1,667,000 square meters (64,000 square Site area (floorspace): 2,247,000 square meters (1,796,000 square meters) meters)

Hiroshima Plant Miyoshi Office (including plant)

Environmental Data for FY2005

Hiroshima Plant Wastewater drainage to Enko River and Kaita Bay Actual Actual Atmospheric Pollutants Units Regulation Water pollutants Units Regulation (max.) Max. Min. Avg. 300 190 pH (freshwater) — 5.8~8.6 7.6 6.8 7.2 230 200 pH (seawater) — 5.5~9.0 7.3 6.5 6.9 Boilers ppm 180 75 BOD mg/ℓ 120 25 0.6 6 150 56 COD mg/ℓ 15 11 0.8 3.6 Drying ovens ppm 250 110 SS mg/ℓ 150 9 ND <2.9 Melting furnaces ppm 180 100 Oil mg/ℓ 5 0.9 ND <0.5 NOx Diesel engines ppm 950 550 Copper mg/ℓ 3 0.02 ND <0.01 200 46 Fluorine (freshwater) mg/ℓ 8 0.2 ND <0.1 Heating furnaces ppm 180 100 Fluorine (seawater) mg/ℓ 15 4.6 ND <2 150 44 Zinc mg/ℓ 5 1.9 0.01 0.42 Roasting furnaces ppm 220 31 Soluble iron mg/ℓ 10 0.1 ND <0.1 Incinerators ppm 450 180 Soluble manganese mg/ℓ 10 0.7 ND <0.2 0.30 0.014 Total nitrogen mg/ℓ 60 17 0.6 6.4 0.25 0.05 Total phosphorus mg/ℓ 8 5.3 ND <0.66 Boilers g/m3N 0.20 0.02 Coliform groups colonies/cm3 3000 623 0 52 0.10 <0.002 Phenol mg/ℓ 5 0.06 ND <0.02 0.35 0.003 Chromium mg/ℓ 2 0.09 ND <0.02 Drying ovens g/m3N 0.15 0.0027 Lead mg/ℓ 0.1 0.01 ND <0.01 Ash 0.20 0.12 Boric acid (freshwater) mg/ℓ 10 0.36 0.14 0.25 Melting furnaces g/m3N 0.10 0.005 Boric acid (seawater) mg/ℓ 230 1.5 0.07 0.79 Diesel engines g/m3N 0.10 0.027 Ammonia, ammonium, nitrous acid and nitrous mg/ℓ 100 4.6 0.9 2 0.25 0.013 acid compounds Heating furnaces g/m3N 0.20 0.029 The following substances were not detected: cadmium, cyanogen, organic phosphorus, Roasting furnaces g/m3N 0.10 0.001 hexavalent chromium, arsenic, mercury, alkyl mercury, PCB, trichloroethylene, tetrachloroethylene, dichloromethane, carbon tetrachloride, 1.2-dichloroethane, Incinerators g/m3N 0.25 0.14 1.1-dichloroethylene, cis 1.2-dichloroethylene, 1.1.1-trichloroethane, SOx K-value regulation — 7 2 1.1.2-trichloroethane, 1.3-dichloropropene, thiuram, simazine, thiobencarb, benzene, and selenium. Hydrogen chloride Incinerators mg/m3N 700 20 Dioxin Incinerators ng-TEQ/m3N 10 0.6

87 Social & Environmental Report 2006 PRTR (Pollution Release and Transfer Register) for FY2005 ( indicates Class 1 Designated Chemical Substance of which 500 kg/year or more are handled) (Other indications* are of Class 1 Designated Chemical Substances of which 1000 kg/year or more are handled) Hiroshima Plant (Unit: kg/year, except for dioxin which is mg - TEQ/year) Amount Volume Amount Amount Amount Substance Substance group transferred Recycled No. handled Air Water Soil emitted consumed disposed Waste product 1 Water-soluble zinc compounds 18,627 0 229 0 229 15,034 0 3,364 0 29 4,4'-isopropylidenediphenol 3,900 0 0 0 0 0 3,900 0 0

30 Polymer of 4,4'-isopropylidenediphenol and 4,901 0 0 0 0 4,901 0 0 0 1-chloro-2,3-epoxypropane (in liquid state only) 40 Ethyl benzene 180,923 92,904 0 0 92,904 46,025 39,427 0 2,567 43 Ethylene glycol 1,183,710 7 0 0 7 1,183,703 0 0 0 63 Xylene 883,959 344,473 0 0 344,473 215,635 187,391 0 136,460 68 Chromium and trivalent chromium compounds 96,841 0 0 0 0 93,346 0 3,486 9 69* Hexavalent chromium compounds 8,521 0 0 0 0 5,035 3,486 0 0 179* Dioxins 66.23 54.7 0.83 0 55.53 0 0 10.7 0 198 1,3,5,7-tetraazetoricyclo [3.3.1.13.7] decane 149,836 0 0 0 0 0 149,836 0 0 224 1,3,5-trimethylbenzene 58,142 20,465 0 0 20,465 10,183 15,662 0 11,832 227 Toluene 1,016,552 256,397 0 0 256,397 389,422 352,628 0 18,105 231 Nickel 25,950 0 0 0 0 25,945 0 0 5 232* Nickel compounds 2,823 0 342 0 342 970 0 1,511 0 253 Hydrazine 1,105 0 0 0 0 0 1,105 0 0 266 Phenol 828,728 20 24 0 44 0 828,684 0 0 272 Bis (2-ethylhexyl) phthalate 5,094 0 0 0 0 4,941 153 0 0 299* Benzene 29,332 105 0 0 105 18,567 10,660 0 0 310 Formaldehyde 306,230 2,461 0 0 2,461 0 303,769 0 0 311 Manganese and its compounds 403,528 0 253 0 253 401,837 0 1,399 39 346 Molybdenum and its compounds 5,774 0 0 0 0 3,261 0 124 2,389 Total 5,214,476 716,832 848 0 717,680 2,418,805 1,896,701 9,884 171,406

Environmental Data for FY2005

Miyoshi Office (including plant) Wastewater drainage to Basen River Actual Atmospheric pollutants Units Regulation Actual (max.) Water pollutants Units Regulation Max. Min. Avg. Boilers ppm 250 220 pH — 5.8~8.6 7.8 7.2 7.6 NOx Diesel engines ppm 950 790 BOD mg/ℓ 70 3.8 ND <2 Boilers g/m3N 0.30 0.073 SS mg/ℓ 70 4 ND <1.9 Ash Diesel engines g/m3N 0.10 0.055 Oil mg/ℓ 5 0.7 ND <0.5 SOx K-value regulation — 17.5 3.4 Fluorin mg/ℓ 8 0.5 0.5 0.5 Zinc mg/ℓ 5 0.01 0.01 0.01 Soluble iron mg/ℓ 10 0.1 0.1 0.1 Soluble manganese mg/ℓ 10 0.2 ND <0.1 Total nitrogen mg/ℓ 60 0.6 0.6 0.6 Total phosphorus mg/ℓ 8 0.02 0.02 0.02 Coliform groups colonies/cm3 3000 215 0 57 Boric acid mg/ℓ 10 0.06 0.06 0.06 Phenol mg/ℓ 5 0.02 0.02 0.02 Lead mg/ℓ 0.1 0.05 ND <0.01 The following substances were not detected: cadmium, cyanogen, organic phosphorus, hexavalent chromium, arsenic, mercury, alkyl mercury, PCB, trichloroethylene, tetrachloroethylene, dichloromethane, carbon tetrachloride, 1.2-dichloroethane, 1.1-dichloroethylene, cis 1.2-dichloroethylene, 1.1.1-trichloroethane, 1.1.2-trichloroethane, 1.3-dichloropropene, thiuram, simazine, thiobencarb, benzene, selenium, copper, chromium, ammonia, ammonium, nitrous acid and nitrous acid compounds

PRTR (Pollution Release and Transfer Register) for FY2005 ( indicates Class 1 Designated Chemical Substance of which 500 kg/year or more are handled) (Other indications* are of Class 1 Designated Chemical Substances of which 1000 kg/year or more are handled) Miyoshi Plant (Unit: kg/year) Amount Volume Amount Amount Amount Substance Substance group transferred Recycled No. handled Air Water Soil emitted consumed disposed Waste product 40 Ethyl benzene 9,576 34 0 0 34 0 9,542 0 0 63 Xylene 46,029 160 0 0 160 0 45,869 0 0 224 1,3,5-trimethylbenzene 4,216 13 0 0 13 0 4,203 0 0 227 Toluene 99,813 268 0 0 268 0 99,545 0 0 299* Benzene 3,354 12 0 0 12 0 3,342 0 0 Total 162,988 487 0 0 487 0 162,501 0 0

Social & Environmental Report 2006 88 Site report: Hofu District

Nishinoura District Nakanoseki District

Address: 888-1 Nishinoura, Hofu-shi, Yamaguchi, Japan Address: 415-8 Hamakata, Hofu-shi, Yamaguchi, Japan Operations started: September 1982 Operations started: December 1981 Major products: Passenger cars Major products: Transmissions Employees: 3,278 (as of end of March 2006/including Nakanoseki ISO14001 certification: September 1999 employees) Site area (floorspace): 537,000 square meters (100,000 square meters) ISO14001 certification: September 1998 Site area (floorspace): 792,000 square meters (297,000 square meters)

Hofu Plant, Nishinoura District Hofu Plant, Nakanoseki District

Environmental Data for FY2005

Nishinoura District Wastewater drainage to Oumi Bay Actual Atmospheric pollutants Units Regulation Actual (max.) Water pollutants Units Regulation Max. Min. Avg.

250 30 pH — 5.0~9.0 7.7 7.3 7.5

Boilers ppm 150 51 COD mg/ℓ 40 11 7.8 9.4 NOx 130 70 SS mg/ℓ 30 3.2 1.3 2.3

Drying ovens ppm 230 180 Zinc mg/ℓ 5 0.25 0.08 0.2

0.20 0.03 Total nitrogen mg/ℓ 60 2.7 2.6 2.7 Boilers g/m3N 0.10 0.002 Total phosphorus mg/ℓ 8 1.5 0.83 1.2

Ash 0.35 0.025 Coliform groups colonies/cm3 3000 26 23 25

Drying ovens g/m3N 0.30 0.02 Phenol mg/ℓ 5 0.06 0.02 0.04

0.20 0.006 Boric acid mg/ℓ 230 0.1 ND <0.1

K-value regulation — 4.5 1.20 Fluorine mg/ℓ 15 0.96 0.8 0.88 SOx Total Pollutant Ammonia, ammonium, 3 47.78 10.05 Load Control m N/h nitrous acid and nitrous mg/ℓ 100 1.9 1.6 1.8 acid compounds The following substances were not detected: cadmium, cyanogen, organic phosphorus, hexavalent chromium, arsenic, mercury, alkyl mercury, PCB, trichloroethylene, tetrachloroethylene, dichloromethane, carbon tetrachloride, 1.2-dichloroethane, 1.1-dichloroethylene, cis- 1.2-dichloroethylene, 1.1.1-trichloroethane, 1.1.2-trichloroethane, 1.3-dichloropropene, thiuram, simazine, thiobencarb, benzene, selenium, chromium, soluble manganese, soluble iron, oil and copper.

89 Social & Environmental Report 2006 Environmental data

Environmental Data for FY2005

Nakanoseki District Wastewater drainage to Oumi Bay Actual Atmospheric pollutants Units Regulation Actual (max.) Water pollutants Units Regulation Max. Min. Avg.

NOx Melting furnaces ppm 180 57 pH — 5.0~9.0 7.8 7.1 7.5

0.25 0.008 COD mg/ℓ 40 15 4.3 8.3 Heating furnaces g/m3N Ash 0.20 0.02 SS mg/ℓ 30 19 ND <0.5

Melting furnaces g/m3N 0.20 0.034 Oil mg/ℓ 2 0.8 ND <0.5

K-value regulation K value 4.5 0.23 Copper mg/ℓ 3 0.01 ND <0.01 SOx Total Pollutant m3N/h 17.54 0.05 Zinc mg/ℓ 5 0.09 0.06 0.08 Load Control

Total nitrogen mg/ℓ 60 20 4.9 9.9

Total phosphorus mg/ℓ 8 0.45 0.23 0.34

Coliform groups colonies/cm3 3000 130 100 115

Boric acid mg/ℓ 230 0.4 0.3 0.35

Fluorine mg/ℓ 15 0.16 ND <0.1

Ammonia, ammonium, nitrous acid and nitrous mg/ℓ 100 6.3 0.65 3.5 acid compounds

The following substances were not detected: cadmium, cyanogen, lead, hexavalent chromium, arsenic, mercury, alkyl mercury, trichloroethylene, tetrachloroethylene, dichloromethane, carbon tetrachloride, 1.2-dichloroethane, 1.1-dichloroethylene, cis 1.2-dichloroethylene, 1.1.1-trichloroethane, 1.1.2-trichloroethane, 1.3-dichloropropene, thiuram, simazine, thiobencarb, benzene, selenium, soluble iron, soluble manganese, chromium and phenol.

PRTR (Pollution Release and Transfer Register) for FY2005 ( iindicates Class 1 Designated Chemical Substance of which 500 kg/year or more are handled) (Other indications* are of Class 1 Designated Chemical Substances of which 1000 kg/year or more are handled) Nishinoura District (Unit: kg/year) Amount Volume Amount Amount Amount Substance Substance group transferred Recycled No. handled Air Water Soil emitted consumed disposed Waste product 1 Water-soluble zinc compounds 13,690 0 215 0 215 11,999 0 1,476 0

Polymer of 4,4'-isopropylidenediphenol and 30 2,090 0 0 0 0 2,090 0 0 0 1-chloro-2,3-epoxypropane (in liquid state only)

40 Ethyl benzene 146,110 67,638 0 0 67,638 68,979 9,493 0 0

43 Ethylene glycol 1,557,936 9 0 0 9 1,557,927 0 0 0

63 Xylene 641,716 265,732 0 0 265,732 325,162 37,295 0 13,527

224 1,3,5-trimethylbenzene 64,483 20,225 0 0 20,225 24,411 2,674 0 17,173

227 Toluene 978,773 242,652 0 0 242,652 664,735 34,656 0 36,730

232* Nickel compounds 2,655 0 321 0 321 914 0 1,420 0

272 Bis (2-ethylhexyl) phthalate 17,474 0 0 0 0 16,950 524 0 0

299* Benzene 25,840 92 0 0 92 25,512 236 0 0

311 Manganese and its compounds 5,157 0 224 0 224 3,458 0 1,274 201

Total 3,455,924 596,348 760 0 597,108 2,702,137 84,878 4,170 67,631

Nakanoseki District Amount Volume Amount Amount Amount Substance Substance group transferred Recycled No. handled Air Water Soil emitted consumed disposed Waste product 16 2-aminoethanol 1,188 0 0 0 0 0 1,188 0 0

283 Hydrogen fluoride and its water-soluble salts 1,186 24 0 0 24 0 0 0 1,162

Total 2,374 24 0 0 24 0 1,188 0 1,162

Social & Environmental Report 2006 90 Environmental Data

Environmental Data for FY2005 New Models and Redesigned Models (Passenger Cars in Japan)

All Data Applies to the Standard Version of Each Model

Name Roadster (Mazda MX-5 Miata) MPV Vehicle type CBA-NCEC DBA-LY3P Model LF L3 Type In-line 4 cylinder DOHC 16V In-line 4 cylinder DOHC 16V Engine Displacement (cc) 1998 2260 Specifications Fuel Unleaded premium gasoline Unleaded regular gasoline Fuel supply system EGI EGI Drive RWD FWD Transmission 5MT 4AT Fuel efficiency at 10-15 mode (km/liter) 13.4 12.2 Fuel economy Compliance with the Japanese 2010 fuel efficiency standardsrds — +10% Regulations complied with 2005 2005 Low Emission Vehicle level U-LEV SU-LEV CO (g/km) 1.15 1.15 Exhaust emissions NMHC (g/km) 0.025 0.013 NOx (g/km) 0.025 0.013 Low pollution vehicle (local governments)* Yes Yes Regulation complied with 1998 regulation 1999 regulation External noise Regulation value complied with (dB-(A)) 76 76 Air conditioner refrigerant HFC-134a HFC-134a Greenhouse gases Amount of air conditioner refrigerant used (g) 450 725

CO2 emissions (g/km) 173.3 190.3 Easily-recycled thermosetting plastics are Easily-recycled thermosetting plastics are Parts using easily-recycled materials used for the bumpers and interior parts used for the bumpers and interior parts Recycling Front bumper, rear bumper, Parts made from recycled bumpers Undercover, etc. splash shield, etc. Material identification on plastic parts Yes Yes

Use of environmentally Lead usage compared to 1996 1/10 or less 1/10 or less substances * 8 metropolitan prefectures and cities around Tokyo, and 6 prefectures and cities in the Kyoto/Osaka/Kobe region Information on other models is contained on Mazda’s website

Number of Low-polluting Vehicles Sold during FY2005

Passenger Cars Tracks Total Standard/Compact Micro-mini Standard/Compact Micro-mini Electric vehicles 00000 Hybrid vehicles 00000 Low- polluting CNG vehicles 0 0 18 0 18 vehicles Methanol vehicles 00000 Hydrogen RE vehicles 20002

Vehicles SU-LEV: 75% lower than 2005 exhaust emissions standards 132,914 4,940 0 0 137,854 approved U-LEV: 50% lower than 2005 exhaust emissions standards 20,515 31,570 3,791 363 56,239 for high fuel efficiency U-LEV: 75% lower than 2000 exhaust emissions standards 00000 and low emissions E-LEV: 50% lower than 2000 exhaust emissions standards 0 0 0 3,909 3,909 status* T-LEV: 25% lower than 2000 exhaust emissions standards 0730073 Diesel alternative LPG vehicles — — 134 — 134 Total 153,431 36,583 3,943 4,272 198,229 * Cars which achieved fuel efficiency standards set by the Energy Saving Act, and which are designated low-emissions vehicles based on the low-emissions vehicle approval guidelines.

91 Social & Environmental Report 2006 Topics Referenced in GRI Guidelines

Corresponding Web- Item Definition report page sites 1. Vision and Strategy 1.1 Statement of the organization's vision and strategy regarding its contribution to sustainable development. 3, 7 1.2 Statement from the CEO (or equivalent senior manager) describing key elements of the report. 4-6 2. Profile Organizational Profile 2.1 Name of reporting organization. 1 2.2 Major products and/or services, including brands if appropriate. 1 2.3 Operational structure of the organization. 1 2.4 Description of major divisions, operating companies, subsidiaries, and joint ventures. 1 2.5 Countries in which the organization's operations are located. 1 2.6 Nature of ownership; legal form. 1 2.7 Nature of markets served. 1 2.8 Scale of the reporting organization. 1 2.9 List of stakeholders, key attributes of each, and relationship to the reporting organization. 7 Report scope 2.10 Contact person(s) for the report, including e-mail and web addresses. 2 2.11 Reporting period (e.g., fiscal/calendar year) for information provided. 2 2.12 Date of most recent previous report (if any). 2 2.13 Boundaries of report (countries/regions, products/services, divisions/facilities/joint ventures/subsidiaries) 2 Report Profile 2.17 Decisions not to apply GRI Principles or Protocols in the preparation of this report. 2 2.18 Criteria/definitions used in any accounting for economic, environmental, and social costs and benefits. 43, 44, 65, 66 2.19 Significant changes from previous years in the measurement methods applied to key economic, environmental, and social information. 65-66 2.20 Policies and internal practices to enhance and provide assurance about the accuracy, completeness, and reliability that can be placed on the sustainability report. 2 Means by which report users can obtain additional information and reports about economic, environmental, and social aspects of the 2.22 2 organization’s activities, including facility-specific information 3. Governance Structure and Management Systems Structure and Governance Governance structure of the organization, including major committees under the board of directors that are responsible for setting strategy 3.1 8 and for oversight of the organization. 3.2 Percentage of the board of directors that are independent, non-executive directors. 8 3.4 Board-level processes for overseeing the organization's identification and management of economic, environmental, and social risks and opportunities. 12, 13 3.6 Organizational structure and key individuals responsible for oversight, implementation, and audit of economic, environmental, social, and related policies. 7, 8, 13, 63, 64 1, 3, 9, 11, 13, Mission and values statements, internally developed codes of conduct or principles, and polices relevant to economic, environmental, 3.7 38, 49, 50, 51, and social performance and the status of implementation. 58, 59-60 3.8 Mechanisms for shareholders to provide recommendations or direction to the board of directors. 8, 43 Stakeholder Engagement 3.9 Basis for identification and selection of major stakeholders. 7 3.10 Approaches to stakeholder consultation reported in terms of frequency of consultations by type and by stakeholder group. 33-56 3.11 Type of information generated by stakeholder consultations. 33-56 3.12 Use of information resulting from stakeholder engagements. 33-56 Overarching Policies and Management Systems 3.13 Explanation of whether and how the precautionary approach or principle is addressed by the organization. 12, 13 3.15 Principal memberships in industry and business associations, and/or national/international advocacy organizations. 1, 86 41, 42, 63, 64, 3.16 Policies and/or systems for managing upstream and downstream impacts. 65, 66, 85 3.17 Reporting organization's approach to managing indirect economic, environmental, and social impacts resulting from its activities. 63-64 7-13, 59-60, 3.19 Programmes and procedures pertaining to economic, environmental, social performance and its details. 61-64 3.20 Status of certification pertaining to economic, environmental, and social management systems. 64 4. GRI Content Index 4.1 A table identifying location of each element of the GRI Report Content, by section and indicator. 92-93 5. Performance Indicators Economic Performance Indicators Customers EC1 Net sales. 44 EC2 Geographic breakdown of markets. 44 Providers of Capital EC7 Increase/decrease in retained earnings at end of period. 43 Environmental Performance Indicators Materials EN1 Total materials use other than water, by type. 61 Energy EN3 Direct energy use segmented by primary source. 61-62, 77 EN17 Initiatives to use renewable energy sources and to increase energy efficiency. 77, 85 Water EN5 Total water use. 61 EN21 Annual withdrawals of ground and surface water as a percent of annual renewable quantity of water available from the sources. 79 EN22 Total recycling and reuse of water. 61 Emissions, Effluents, and Waste EN8 Greenhouse gas emissions (CO2, CH4, N2O, HFCs, PFCs, SF6). 61, 77 EN10 NOx, SOx, and other significant air emissions by type. 61, 87-90 EN11 Total amount of waste by type and destination. 78 EN13 Significant spills of chemicals, oils, and fuels in terms of total number and total volume. 64 Products and Services EN14 Significant environmental impacts of principal products and services. 67-74, 91 EN15 Percentage of the weight of products sold that is reclaimable at the end of the products' useful life and percentage that is actually reclaimed. 73-74 Compliance with Declarations, Conventions, Treaties Incidents of and fines for non-compliance with all applicable international declarations/conventions/treaties, and national, sub-national, EN16 64, 87-90 regional, and local regulations associated with environmental issues.

Social & Environmental Report 2006 92 Topics Referenced in GRI Guidelines

Corresponding Web- Item Definition report page sites Environmental Performance Indicators Transport EN34 Significant environmental impacts of transportation used for logistical purposes. 81~82 Overall EN35 Total environmental expenditures by type. 65~66, 83 Social Performance Labor Practices and Decent Work Employment LA1 Breakdown of workforce. — LA2 Net employment creation and average turnover segmented by region/country. — Policy and procedures involving information, consultation, and negotiation with employees over changes in the reporting organization’s LA4 50 operations (e.g., restructuring). LA12 Employee benefits beyond those legally mandated. 48, 50 Description of formal agreements with trade unions or other bona fide employee representatives covering health and safety at work and LA15 49~50 proportion of the workforce covered by any such agreements. Health and Safety Practices on recording and notification of occupational accidents and diseases, and how they relate to the ILO Code of Practice on LA5 49 Recording and Notification of Occupational Accidents and Diseases. Description of formal joint health and safety committees comprising management and worker representatives and proportion of workforce LA6 49~50 covered by any such committees LA7 Standard injury, lost day, and absentee rates and number of work-related fatalities (including subcontracted workers). 49 LA8 Description of policies or programs (for the workplace and beyond) on HIV/AIDS. — Training and Education LA16 Description of programs to support the continued employability of employees and to manage career endings. 45~48 LA17 Specific policies and programs for skills management or for lifelong learning. 45~47 Diversity and Opportunity LA10 Description of equal opportunity policies or programs, as well as monitoring systems to ensure compliance and results of monitoring. 45~48 Human Rights Strategy and Management Description of policies, guidelines, corporate structure, and procedures to deal with all aspects of human rights relevant to operations, HR1 11~12 including monitoring mechanisms and results. Evidence of consideration of human rights impacts as part of investment and procurement decisions, including selection of 10, 15~16, HR2 suppliers/contractors. 41~42 Description of policies and procedures to evaluate and address human rights performance within the supply chain and contractors, including HR3 41~42 monitoring systems and results of monitoring. HR8 Employee training on policies and practices concerning all aspects of human rights relevant to operations. 11~12 Non-discrimination HR4 Description of global policy and procedures/programs preventing all forms of discrimination in operations. 9~12 Freedom of Association and Collective Bargaining Description of freedom of association policy and extent to which this policy is universally applied independent of local laws, as well as HR5 50 description of procedures to address this issue. Child Labor Description of policy excluding child labour as defined by the ILO Convention 138 and extent to which this policy is visibly stated and applies, HR6 9~10 as well as description of procedures/programmes to address this issue, including monitoring systems and results of monitoring. Forced and Compulsory Labor Description of policy to prevent forced and compulsory labor and extent to which this policy is visibly stated and applied as well as description HR7 9~10 of procedures/programmes to address this issue, including monitoring systems and results of monitoring. Disciplinary Practices HR9 Description of appeal practices, including but not limited to human rights issues. 11~12 HR10 Description of non-retaliation policy and effective, confidential employee grievance system (including, but not limited to, its impact on human rights) 9~12 Security Practices HR11 Human rights training for security personnel. Include type of training, number of persons trained and average training duration. 11~12 Society Community Description of policies to manage impacts on communities in areas affected by activities, as well as description of procedures/programmes to SO1 51~53 address this issue, including monitoring systems and results of monitoring. SO4 Awards received relevant to social, ethical, and environmental performance. 21, 29~30, 77 Bribery and Corruption Description of the policy, procedures/management systems, and compliance mechanisms for organizations and employees addressing SO2 9~10 bribery and corruption. SO7 Description of policy, procedures/management systems, and compliance mechanisms for preventing anti-competitive behavior. 9~10 Product Responsibility Customer Health and Safety Description of policy for preserving customer health and safety during use of products and services, and extent to which this policy is visibly stated 17~18, 35~40 PR1 and applied, as well as description of procedures/programs to address this issue, including monitoring systems and results of monitoring. 75~76 Number and type of instances of non-compliance with regulations concerning customer health and safety, including the penalties and fines PR4 36, 67~68 assessed for these breaches. PR5 Number of complaints upheld by regulatory or similar official bodies to oversee or regulate the health and safety of products and services. 33, 36 Voluntary code compliance, product labels or awards with respect to social and/or environmental responsibility that the reporter is qualified to PR6 67~70, 91 use or has received. Products and Services 35~36, 59, 60, PR2 Description of policy, procedures/management systems, and compliance mechanisms related to product information and labeling. 67~70 PR8 Description of policy, procedures/management systems, and compliance mechanisms related to customer satisfaction, including results of surveys. 33~34 Respect for Privacy PR3 Description of policy, procedures/management systems, and compliance mechanisms for consumer privacy. 34

93 Social & Environmental Report 2006 Third-Party Opinion

The following third-party opinion concerns Mazda’s disclosure of social and environmental information in this report from the standpoint of providing corporate data for socially responsible investment to financial institutions. These days, corporate attitudes and responses to environmental problems and the consideration displayed toward social issues are recognized as having an influence on people’s lives and being a defining factor in the value of a corporation. This is evidenced in the Principles for Responsible Investment issued by the United Nations, which state that: “We will seek appropriate disclosure on environmental and social governance (ESG) issues Eiichiro Adachi by the entities in which we invest.” Senior Producer My first response to the phrase “ESG issues” is to think of identification of Japan Research Institute, Limited risks. From the standpoint of ESG, the company must estimate the types of risks (those with a possible negative impact on management results) and then assess whether or not they are taking appropriate measures against these risks. Accordingly, although the contents of this publication are comprehensive, there are still some challenges in the disclosure of assumed risks. Securities reports include a section on “business and other risks,” spanning environmental problems, vehicle safety, and regulations on fuel economy and exhaust emissions for each country. I would like this publication, too, to depict how each measure was deduced from each estimated risk and to assess the effects of risk avoidance for these measures. In addition to governmental regulations, relationships with suppliers are also of great importance. Moreover, considering the high ratio of overseas sales, there is a pressing need to promote integrated global disclosure. A second focal point regarding ESG pertains to business opportunities arising from social and environmental areas of the company. Description of the progress made in realizing the unique Mazda hydrogen rotary engine in this report left a strong impression on me. I am looking forward to the further disclosure of information on the development of alternative fuel vehicles and bioplastics. Achieving the dual goals of “being aware of the environment” and “emotional driving” is not easy. However, strategies regarding this dilemma are reported admirably. I would like to see Mazda—as one of the industry’s leading companies—demonstrating how to overcome social and environmental risks and still be able to create business opportunities.

These comments do not constitute a judgment on whether this report presents accurate measurements and calculations, has any major omissions, or was prepared in accordance with generally recognized fair and appropriate production standards for environmental and other reports.

Social & Environmental Report 2006 94 Mazda Motor Corporation

3-1 Shinchi, Fuchu-cho, Aki-gun, Hiroshima 730-8670 October 2006

• Printed on non-wood fiber Kenaf paper.