HAVING amassed the largest liabilities of all 70 car-makers in the New Vehicle Efficiency Standard Regulator’s first report Mazda Australia has described NVES as a “secondary” consideration as it introduces a new version of its best-selling vehicle in petrol all-wheel-drive format only.
With battery electric vehicles still months away from joining Mazda Australia’s portfolio, the Japanese importer is reliant on the sales performance of its limited mild hybrid and plug-in hybrid offerings to balance its internal combustion volume, placing it in an unenviable position against rivals.
However, local Mazda leadership says passing on NVES penalties to customers “will be the last option we take”.
Framing NVES as “secondary”, Mr Bhindi said the impact of legislation “is something that happens behind the scenes”.
“We have to work in that environment, and so does every other brand. The end result of all of that is just the cost of doing business in Australia.
“Our priority is to meet consumer needs, wants, and demands. So, that’s the way we look at it.”
While standing firm on his point, Mr Bhindi said Mazda would continue to adjust its model mix as NVES regulations tightened, ensuring it would mitigate the cost of any penalties being forwarded to its customers.
“We are realistic. We know that building a car, manufacturing a car, assembling a car, and shipping a car all takes time – and we need it to be right,” he explained.
“There are three things that, when it comes to NVES, we need to look at.
“The first and foremost is to offer products and technologies that there is a market for and that customer wants, but that as a side benefit can get us credits to maximise our NVES position.
“Secondly, the legislators have created an arena where car brands have to do a bit of horse trading on credits … and there will be very cheap credits available at a point in time.
“And from our point of view, the last thing is the passing on of that cost. If you can balance the cost of doing business with the levers you have at your disposal, then you don’t have to worry about that last piece (passing on costs to customers).
“But if it does happen, then that will be the last option we take.”
Mr Bhindi pointed to the fact that Australia battery electric vehicle take-up remains relatively low, suggesting the model mix Mazda will offer locally between now and the end of the decade will work to complement NVES demands, meaning little (if any) additional costs will be passed on to Mazda customers.
“Our thinking is, let’s first get the products that help us keep the price points and value of our technologies reasonable for our customers,” he added.
“The battery electric market is under 10 per cent of the market at the moment, and while we know it will grow, we don’t know how quickly it will grow.
“If there are very cheap credits available, and those credits help consumers (to afford familiar powertrain offerings) then it will help us maintain prices within a reasonable zone.
“NVES is designed so that consumers can still get the car they need, and the car they want. Not everybody will buy a battery-electric (vehicle), and not everybody in the future will buy ICE.
“So, let’s fix the option that helps consumers first, and let the cost of doing business find its level.”
In the meantime, Mazda is turning to China so it can introduce two BEVs this year – the 6e sedan and CX-6e SUV – while a petrol-electric hybrid CX-5 will not arrive until late 2027.
Mr Bhindi said that should consumer demand for more electrified offerings intensify more rapidly than anticipated, it had the option to lean on alliance partners like Changan Automobile (which currently makes the 6e and CX-6e for Mazda) in delivering other alternatives for the Australian market.
“Provided there is demand, that is a lever we can pull,” Mr Bhindi told GoAuto.
“If customers in Australia are comfortable with a car in terms of their budgets, then I think the 6e and CX-6e will suit most buyers’ needs.
“Where we expand beyond there – whether smaller, cheaper, bigger, more expensive, all of those options – are options that consumer feedback will dictate. Only then will we pull the lever.”
Mazda Motor Corporation general manager of global sales and marketing Manabu Osuga said customer input will be critical in deciding which – if any – electric model will be introduced next.
“We have such a great partnership with Changan (Automobile) and the thing we are discussing with this partner is how we can evolve the Chinese market while at the same time best utilising our 200,000 unit per annum production capacity we have in China,” he said.
“The Mazda 6e and Mazda CX-6e are the first two products we are providing outside of China. Once we gain consumer feedback (on these models) from the global market, then we can use that voice of customer to consider other models.
“So, at this moment, I really don’t know what type of car we will produce next.”
Mr Osuga said that should interest in the Mazda 6e and CX-6e – or any future electric vehicle built in collaboration with Changan Automobile – prove successful, Mazda Motor Corporation had the option to increase annual outputs beyond the current 200,000-unit limit.
“While I must remain sensitive about our production capacity … our desire is to exceed demand over supply,” he added.
“We want to be an admired brand, and if the customer asks for more, then we can of course consider it. But at the moment, of course, it is too soon to make such a decision.”