Mazda 3 sales decline explained: Brand concedes price hike was "too large", promises extra value

Mazda concedes the price jump for its all-new Mazda3 could have been "too large", resulting in slower sales for the popular hatch and sedan. 

That's the word from Mazda CEO Akira Marumoto, who told US outlet Automotive News that essentially removing the entry-level Mazda3 had resulted in fewer sales in the USA. In that market, the cheapest Mazda 3 is reportedly selling slower than models further up the range. 

The problem, according to Mr Marumoto, was a lack of communication over the value offered in the new entry-level model, which would go some way to justifying a price "hike that was maybe just a little too high".

"The price jump for the entry-level could have been too large — that is something we are reflecting on right now," he said.

"For the previous-generation Mazda3, there were entry, core and high-grade models. For the entry, the price was around $17,000 or $18,000. We made a conscious decision not to battle in that arena anymore. The new Mazda3 entry level sits around the $21,000 level. That's where we think the hike was maybe just a little too high.

"If customers had better understood the value of the new model, then there wouldn't have been a problem. But our problem was that we were not successful in communicating the value of this model. We need to improve that.

"The people in that market are pretty price-conscious. We have to communicate these values in a more easy-to-understand manner."

Read More: From first place to 10th: What's going on with the Mazda 3?

From first place to 10th: What's going on with the Mazda 3?

In Australia, the fourth-generation Mazda3 also ushered in price increases, with the cheapest Neo and Maxx Sport models dropped.

Instead, the model lineup comprised six grades, the new line-up starts at $24,990 before on-road costs for the entry-level G20 Pure (manual), stepping through the G20 Evolve ($26,690), G20 Touring ($28,990), G25 Evolve ($29,490), G25 GT ($33,490), and finally running up to $36,990 for the G25 Astina.

That $24,990 starting price represents a significant $4.5k increase over the $20,490 entry point of the outgoing range. 

Mazda3 sales have had a tough year in Australia, with its 23,654 sales to the end of November marking a 17.8 per cent decline on 2018's year to date totals. 

The solution, Mr Marumoto told Automotive News, is to add value to the Mazda3 range, rather than reduce prices - at least in the USA.

"Without reducing the price, we're raising the value for the 2020 model year," he says.

"We're going to add easy-to-understand value. For example, safety features. At the same time, we're going to add a powertrain option so we can lift the high-end even higher."