New-vehicle gross profits are falling across the auto retail industry and Mazda is no exception, said Rob Sickel, the new chairman of Mazda’s National Dealer Advisory Council.
Despite that shift, Mazda dealers’ overall profitability is still on the rise with profits up 85 percent in September 2024 at the brand’s Retail Evolution facilities compared with pre-COVID levels.
Maintaining strong customer service and increasing brand awareness are two of Sickel’s goals for Mazda dealers in 2025. The dealers want to keep up their strong momentum this year, he said.
“Mazda is obviously on a growth path right now and they are building more vehicles,” Sickel said. “But as they are building them, we are selling them at a pretty good rate.”
At the end of last year, new inventory levels at Mazda dealers were relatively stable, Sickel added. He expects days’ supply at Mazda dealers to fluctuate throughout 2025 but to average somewhere between 45 and 60 days.
“We have vehicles to sell, but we don’t have too many vehicles,” he said.
Sickel also is waiting to see how inflation and other economic factors play out in 2025. How far car buyers’ money can go and how the Federal Reserve manages the benchmark rate will impact the industry, he said.
“People are kind of holding tight and waiting for the rates to drop,” Sickel added.
Economic headwinds created affordability challenges for many auto customers in recent years. In that regard, Mazda’s lineup is a strength that helps dealers find a range of customers, Sickel said. The brand has vehicles for more budget-conscious buyers and pricier models for the customers looking to get closer to luxury, he said.
“Mazda does want to make sure that their cars are positioned properly in the market between the other models that they compete against,” Sickel said, “as well as making sure the vehicles are in the right budget for their customers.”
Source: Automotive News, January 10, 2025