Interview with Wojciech Halarewicz, CEO of Mazda Italy – 1st Part

CEO Mazda Italia

Interview Date: Jun, 1st 2012.

Professional Profile: Wojciech Halarewicz

Remarks: Interview carried by  Emilio Perri

We were lucky to cross on the “our way” Wojciech Halarewicz, CEO of Mazda Italy, what better opportunity to ask him about his international experience? 

Considering the most recent news we cannot but ask for more information on the Alfa Romeo-Mazda agreement, just signed …
The Memorandum signed by the two companies means that we are preparing and evaluating the basis for reaching the final agreement in autumn.
Mazda has always been open to technological and productive partnerships, and we are fully aware that an exchange of this kind with other companies can benefit both sides.

What do you think will be the consequences and the main advantages for Mazda Corporate, in the EU and Italy in particular?
The exchange would allow interesting technological economies of scale in production, with combined costs that would allow to reach the profitability in one niche segment.

Do you think it is expected any additional form of collaboration and commercial distribution for the European market?
The preliminary agreement provides only an hypothesis of industrial and R&D cooperation (product development) and not in the commercial side.

Returning to more general themes, do you think that the segmentation of the market will change? If so, how and why?
If there is a change in segmentation, certainly will not be in the short, I mean not in the next 12 months. I predict – in the sphere of segmentation – a significant growth of the compact SUV segment.

Also considering the established trend of the fuels, I think that the segment A/B in Italy will remain the main one.

Do you think that the purchasing drivers of the consumers could change? If so, in which way?
I believe that at present the main drivers will be:

  • fuel consumption / emissions
  • costs: maintenance, operations, etc.
  • quality and reliability of the car

But what will remain central in the Italian market will surely be design and – crisis or not – the customer is not willing to renounce to it.

Do you think that the car distribution could change in the future? And in which way?
The distribution as is structured today will need time to change. Surely a more strategic distribution system that makes the operations both less costly and more profitable, would be hoped. What I can imagine is a rise in the near future of multibrand structures and – unfortunately – the closedown of many official dealers for liquidity problems.

The concept of single-brand dealer, with more investments and higher standards, is doomed to disappear and the professionalism of the group and the Return on Investment will prevail, making contemporary increasing the trend of consolidation in groups of dealers.

What do you think will be the next “wants” of the customers to satisfy?
The “wants” of the customers remain the same, but we also have to deal with the current situation of the country, and then consider that in addition to the usual “wants” of the clients, the companies must also begin to consider the “needs”.

Undoubtedly the Italian customer aspires to a car with a beautiful design and offering something different, something more of what the competitors offer. In this sense, let me say without fear of being considered immodest, that a company like Mazda has a good potential in the Italian market. We are in fact able to offer, beside a beautiful design, concrete values like quality, reduced fuel consumption and also a high residual value that allows to manage the replacement cycle of products.

The Italian market continues to decrease while the world market … continues to grow. There have been changes in the approach of the companies regarding our market?
In 2011 the Italian market share for light passengers (cars + light commercial vehicles) weighed 2.5% of the world (was 3.7% in 2008).

I think the market doesn’t have to adapt to the companies, but exactly the opposite, the companies have to adapt to the changing market conditions.

From this point of view, our Mother House continues to consider the Italian market as a top priority and we – as leaders of the domestic market – are implementing a series of actions in order to achieve efficiency in the reduction of costs with carefully targeted investments with a great attention to the profitability that cannot be compromised in any way.

The great global crisis is particularly afflicting the automotive world and, as some operators say, it is worse than that of the beginning of the last century. The recurring leitmotif is that nobody has an idea about how to treat it, considering that who has already lived and experienced it personally is no longer living. In your personal vision do you have an idea on how to reverse this negative period into opportunity?
The transformation of a negative contingency into opportunity is an idea at the basis of positive thinking, which must be seriously taken into account today. I think in any case that the best thing to do for the companies is to invest in emerging markets, increasing their presence in these new countries and reducing the costs – even to maintain the efficiency – in the European market. We have the obligation to make our network profitable so that it is ready to react to the first sign of market recovery.

However, even and especially in times of crisis, there are signs of the market that can offer big opportunities: the launch of the CX5 – for example – considering the growing of the compact SUV segment, is a good card to play for our company.

In the last years there have been much talk about BRIC and every day we see authentic marathons on investments in these new Low Cost Countries. In your long experience what’s your idea about the future of BRIC? In your opinion what will be the “Next Generation” worthy of attention from investors and able to replace the BRIC?
I think the BRIC countries will remain at the center of attention for a long time. However, I disagree on the definition of low cost countries: the so-called emerging countries are demanding, aspire to modern products, with innovative cars driven by alternative fuels, consider for example the wide diffusion of ethanol in Brazil.

It ‘a legacy of the past the idea of exporting obsolete technologies to these countries. Right now I’m convinced that these countries represent the best opportunity for growth in profitability, while I believe that in the future will remain the central importance of the United States, Japan and of course the old Europe. Mazda also recognizes the importance of investing in these countries: there is a short term project for an assembly plant in Russia, a booming market of great importance for us, but I can assure you that the cars assembled in this plant will never be of “low cost”.

Do you believe that the current organizational models of manufacturers are appropriate to the socio-economic perspectives to which we are facing?
Sure there is margin for improvement. Mazda – for example – has implemented a real revolution in terms of organization: an complex 360-degree initiative which involves all worldwide locations. The objective is to contain and – in some cases – to reduce administrative costs without compromising the business effectiveness.

Another area where it is essential to act is the distribution. Since the current model is obsolete we need to change it to make it more flexible and consequently more profitable. An internal solution for the Companies could be strengthening the structures where decisions are made (e.g. by assigning more responsibility and autonomy to the branches) and drastically reducing the bureaucracy.

… the second part.

(Translated by Raffaele Vincenti)

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