Residual values revolve around supply and demand. Much of the demand side is constituted by product desirability. Supply, on the other hand, hinges on manufacturer price and volume behavior. Residual value goes hand-in-hand with brand value, which is negatively influenced by discounts. Minimizing incentives by closely matching supply to demand is in a manufacturer’s best interests.
We recently drove the Mazda6 and Mazda CX-5, both powered by the new SKYACTIV-G 2.5L inline-4 and both of which provide a satisfying drive experience along with very competitive fuel efficiency. Our residual forecast will reflect those positive demand drivers. The question is on the supply side – keeping up with dynamic market conditions and implementing production flexibility.
The new SKYACTIV engines, developed in-house, help Mazda stay lithe—most of their engines can now be manufactured along a single line. Mazda completely revamped their engine factory tooling, replacing 45 single-purpose machine stations per line with only 4 CNC machines.
Engine mix on a given model can be effortlessly altered to match global demand. Even more importantly, the same goes for model mixes; if CX-5 demand suddenly increases while Mazda6 demand wanes, Mazda can more easily convert short-term Mazda6 production to CX-5 on the fly.
According to Mazda’s R&D Group Manager Ruben Archilla, the financial benefits brought about by the new powertrain factory setup include a 75% reduction of start-to-finish production hours and a 70% reduction in capital investment. From ALG’s perspective, this revised manufacturing approach gives Mazda greater control of supply, helping avoid marketing tactics like incentives and fleet — tactics that keep supply flowing, but at a cost to residual values.Tags: mazda