Mazda looks to next-gen CX-5 for a lift

Kedis82ZE8

'15 CX-5 GT AWD, '12 GX 460, '07 G35x
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'15 CX-5 GT AWD
Mazda looks to next-gen CX-5 for a lift

A two-step plan to pull ahead of the pack

HIROSHIMA, Japan -- Mazda Motor Corp. CEO Masamichi Kogai, fighting sliding sales and a tougher U.S. auto market, is banking on an ambitious next-generation product plan to lift the boutique Japanese brand above its mass-market competitors.

In an interview, Kogai described the strategy as a two-step jump to break from the pack in terms of brand image, pricing power and profitability.

Step one came in 2012 with the debut of Mazda's Skyactiv lightweight platform and range of fuel-efficient powertrains. Step two now kicks off with the next-generation CX-5 crossover unveiled in November in Los Angeles.

The CX-5 is the lead nameplate for a lineup overhaul that will culminate in the full deployment of Skyactiv 2 products by March 31, 2019.

"We need two successful jumps up," Kogai said in a November interview at the carmaker's global headquarters here. "Now we are going to start our offensive again."

Mazda is one of Japan's smallest car brands, and Kogai's goal is to elevate it above its larger-volume players. Doing so is critical to the company's long-term viability as an export-dependent niche brand that requires higher margins to reinvest in costly alternative drivetrains and advanced safety technology.

Kogai's strategy aims to:

Hold the line on incentives to boost transaction prices.

Cultivate an upmarket aura around the brand with sporty handling, elegant interiors and sumptuous design.

Improve the brand's low customer-retention rate to 60 percent.

Achieving all that will require getting Mazda's dealers on board with the image make-over.

"We want to distinguish ourselves by being a little elevated above the other Japanese or mainstream brands," Kogai said.

Upward and uphill

Kogai's ambitions will face some tough realities.

Through November, Mazda's U.S. sales dropped 7.2 percent in a market that was flat. And many forecasters believe U.S. auto sales have peaked and are poised to slow even further. In that environment, Mazda will be trying to lift its prices as rivals slash theirs amid a possible price war.

The company's brand metrics also have a way to go.

Mazda ranked below the industry average this year in three closely watched J.D. Power studies -- those gauging vehicle dependability, initial quality and customer satisfaction with service.

But Mazda is studying two benchmark brands that Kogai says have done what he wants to do: propel the brand upward through two successive generations of vehicles. He declines to identify the brands Mazda is studying.

They "actually repeated the same kind of success twice," Kogai said. "We have had only one leap so far, from the [previous] generation of products to the [current] generation that we introduced starting in 2012. We really need to achieve a similarly big leap from the [current] generation to [next] generation."

The redesigned CX-5 hints at what's in store. The popular crossover doesn't get the new Skyactiv 2 drivetrain technology, which Mazda says will deliver a 30 percent boost to fuel economy through an ultrahigh-compression engine.

The technology is a big gambit. Known as homogeneous charge compression ignition, the system compresses the fuel-air mixture to such a high pressure and temperature that it ignites by itself without requiring a spark, similar to the way a diesel engine operates.

But the CX-5 gets Skyactiv 2 treatment in design, chassis technology and Mazda's new G-Vectoring Control system, which delivers sharper handling and a smoother ride.

The outgoing CX-5 was the original vehicle to get the full suite of first-generation Skyactiv technologies. The first vehicle with the complete set of Skyactiv 2 goodies should arrive by April 2019.

"We are introducing the CX-5, so that means we are coming back to the leadoff batter in our lineup," Kogai said. Mazda is so bullish about the upcoming CX-5, it believes it will sell an average of 400,000 a year worldwide over the vehicle's life. Last year, Mazda sold 370,000.

U.S. sales of the CX-5 were up 0.2 percent to 100,246 through November.

"Right Price'

Kogai calls the upmarket move Mazda's "Right Price Strategy." It involves a new approach to incentives.

This year, Mazda shifted the focus of its dealer incentives to representing the brand better rather than selling more cars, Kogai said. The new thrust encourages better training of dealership employees, better customer service and better product pitches.

"We want to avoid boosting volume by discounting. If we do that, customers who buy that way will go to a cheaper brand when it's time to buy a new vehicle," Kogai said. "If we pursue that approach, we won't be able to improve our customer retention."

Mazda's average U.S. transaction price rose just 1.9 percent through October, from a year earlier, according to Kelley Blue Book. That trailed an industry average increase of 3.5 percent.

Mazda's interim goal is bringing more customers back to buy another Mazda.

Mazda's U.S. retention rate is a lackluster 37 percent. While that is up from around 26 percent in 2011, Kogai concedes "it's not that great." He wants it to top 60 percent in five years. "In Japan, the retention rate is more than 50 percent," he said. "We want the U.S. rate to catch up."
 

yrwei52

2016 Mazda CX-5 GT AWD w/Tech Pkg
Contributor
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Plano, Texas, USA
Mazda's U.S. retention rate is a lackluster 37 percent. While that is up from around 26 percent in 2011, Kogai concedes "it's not that great." He wants it to top 60 percent in five years. "In Japan, the retention rate is more than 50 percent," he said. "We want the U.S. rate to catch up."
This speaks a major problem for Mazda, especially in US market. Why most Mazda owners lack interest to buy another Mazda when the time comes in the US? I believe the problem still is on quality and reliability. I've been saying that although Mazda's quality and reliability have been improved for recent years, which also showed on the slightly increased retention rate, but they're still hit-and-miss. Mazda has to do much better job in these two departments, or it won't change the perception of most car buyers!
The company's brand metrics also have a way to go.
Mazda ranked below the industry average this year in three closely watched J.D. Power studies -- those gauging vehicle dependability, initial quality and customer satisfaction with service.

SkyActiv 2 can be a game changer for Mazda. But until April, 2019? That could be a little too late!
The outgoing CX-5 was the original vehicle to get the full suite of first-generation Skyactiv technologies. The first vehicle with the complete set of Skyactiv 2 goodies should arrive by April 2019.
 
:
2021 CX-9 Sig
:
2014 CX-5 GT
This speaks a major problem for Mazda, especially in US market. Why most Mazda owners lack interest to buy another Mazda when the time comes in the US? I believe the problem still is on quality and reliability. I've been saying that although Mazda's quality and reliability have been improved for recent years, which also showed on the slightly increased retention rate, but they're still hit-and-miss. Mazda has to do much better job in these two departments, or it won't change the perception of most car buyers!


SkyActiv 2 can be a game changer for Mazda. But until April, 2019? That could be a little too late!

Yes, I wonder why the retention rate is so low.The industry average is 49% so the value is very low. I wonder what people end up buying after their mazda?
 
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yrwei52

2016 Mazda CX-5 GT AWD w/Tech Pkg
Contributor
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Plano, Texas, USA
Yes, I wonder why the retention rate is so low.The industry average is 49% so the value is very low. I wonder what people end up buying after their mazda?
I have a friend who owned several Mazda's for many years. He bought MPV、626、RX-7, but eventually was giving up on them due to poor reliability. He switched to Honda CR-V、Acura MDX、and what else? Lexus RX-350! And bought Lotus Elise and Chevrolet Corvette for fun!

Others one had a RX-7 and swears he would never buy another Mazda and stayed with Toyota's. The other had a Millenia and never came back for another Mazda but only Toyota's. The only exception among my friends and families is one guy lost his 2014 CX-5 FWD Touring due to hail damage and bought another 2016.5 CX-5 FWD GT as he's impressed with CX-5's gas mileage. But now he said his second CX-5 can't get the same gas mileage as his first one, a little disappointment.
 

craigo

Contributor
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2014 CX-5 GT FWD, 2015 Mazda 3 Touring
I have a friend who owned several Mazda's for many years. He bought MPV、626、RX-7, but eventually was giving up on them due to poor reliability. He switched to Honda CR-V、Acura MDX、and what else? Lexus RX-350! And bought Lotus Elise and Chevrolet Corvette for fun!

Others one had a RX-7 and swears he would never buy another Mazda and stayed with Toyota's. The other had a Millenia and never came back for another Mazda but only Toyota's. The only exception among my friends and families is one guy lost his 2014 CX-5 FWD Touring due to hail damage and bought another 2016.5 CX-5 FWD GT as he's impressed with CX-5's gas mileage. But now he said his second CX-5 can't get the same gas mileage as his first one, a little disappointment.

Those are all very old cars. The attitude doesn't surprise me though, people often believe that the current state of an automaker is the same as when they owned one 25 years ago.
 
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2016.5 CX-5 GT AWD
I think there are a couple things at play here.

The first is that most buyers in the US just don't care about how something drives, or if they do, they only care about speed. Since the driving experience and focusing on being driver-centric is Mazda's bread and butter, they're at a disadvantage there. Modern car shoppers want to be completely isolated and disconnected from actually driving their cars.

I believe the second is that I think there are a good amount of people who still think Mazda is still just an off-shoot of Ford. They think of the Miata, think of Ford, and they don't seriously consider the brand. Even my auto mechanic, who I would consider to be a good mechanic, said "They're just Fords in a different package....most of the parts are the same anyway".

Also, I'll add that JD Power is simply a marketing firm, and I don't take any of the awards they give out, or lack-there-of, seriously.
 

tibimakai

San Dimas CA
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USA
:
2014 CX-5 Touring
If they make every car beautiful and exciting to drive, plus more reliable, they have a chance.
 
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2021 CX-9 Sig
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2014 CX-5 GT
I think there are a couple things at play here.

The first is that most buyers in the US just don't care about how something drives, or if they do, they only care about speed. Since the driving experience and focusing on being driver-centric is Mazda's bread and butter, they're at a disadvantage there. Modern car shoppers want to be completely isolated and disconnected from actually driving their cars.

I believe the second is that I think there are a good amount of people who still think Mazda is still just an off-shoot of Ford. They think of the Miata, think of Ford, and they don't seriously consider the brand. Even my auto mechanic, who I would consider to be a good mechanic, said "They're just Fords in a different package....most of the parts are the same anyway".

Also, I'll add that JD Power is simply a marketing firm, and I don't take any of the awards they give out, or lack-there-of, seriously.


I think you missed the point. This is about return customers. People who own a Mazda tend not to re-buy a Mazda. Why? Are the car un-reliable? Do they tend to move up into another class of cars? I have a CX-5 and would consider another Mazda. We looked hard at the Highlander, MDX, Pilot, Buick and CX-9 and the CX-9 was very competitive.

I think the car company with the highest retention rate is either Toyota or Hyundai.
 
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13' CX-5 and 16' Mazda6 both Touring w/Tech/Bose
I'll throw in my 2 cents in Mazda's historic low retention rates and why its steadily improving. I'll just give 1 of many: Limited but improving Lineup.

Consider that Mazda's retention rate improved ever since the CX-5 came out. Prior to the CX-5, Mazda did not have a model to compete with the CRV, Rav-4, Escape, and Forester.

Mazda also does not have a pickup truck, a hybrid, a 2-door coupe, and a 4-seat convertible. Essentially consumers (not most but a substantial number) want such options and need to go elsewhere. Again the CX-5 resolved the small SUV option big time. Credit Mazda for having just about every model in its lineup as solid cars in their classes. The current CX-5, Mazda3, and Miata should have healthy retention rates. Lets take a closer look at 3 key models.

The Mazda6. The midsize sedan is a class where Mazda is hurting in both sales and retention. There's a big piece of the US pie that Mazda is missing mainly because Americans want reliable appliances. The other reason is only one engine choice. Mazda originally planned for the Sky-Activ Diesel model to arrive but has been delayed and thus hurt sales. V6 engines, turbos, and hybrids offered by other makes is killing into Mazda6 sales. Get the Diesel and turbo engines here and it should carve out a healthier niche in sales like it deserves.

CX-9. The jury is still out but the redsigned model has seen a boost sales.

CX-3. In its first year it actually sold well relative to other Mazda's. Its the third most popular Mazda sold behind the CX-5 and Mazda3. It's probably cut into Mazda3 sales but hey its still a Mazda. Man where would Mazda be without the CX-5 and CX-3?
 
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2021 CX-9 Sig
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2014 CX-5 GT
I'll throw in my 2 cents in Mazda's historic low retention rates and why its steadily improving. I'll just give 1 of many: Limited but improving Lineup.

Consider that Mazda's retention rate improved ever since the CX-5 came out. Prior to the CX-5, Mazda did not have a model to compete with the CRV, Rav-4, Escape, and Forester.

Mazda also does not have a pickup truck, a hybrid, a 2-door coupe, and a 4-seat convertible. Essentially consumers (not most but a substantial number) want such options and need to go elsewhere. Again the CX-5 resolved the small SUV option big time. Credit Mazda for having just about every model in its lineup as solid cars in their classes. The current CX-5, Mazda3, and Miata should have healthy retention rates. Lets take a closer look at 3 key models.

The Mazda6. The midsize sedan is a class where Mazda is hurting in both sales and retention. There's a big piece of the US pie that Mazda is missing mainly because Americans want reliable appliances. The other reason is only one engine choice. Mazda originally planned for the Sky-Activ Diesel model to arrive but has been delayed and thus hurt sales. V6 engines, turbos, and hybrids offered by other makes is killing into Mazda6 sales. Get the Diesel and turbo engines here and it should carve out a healthier niche in sales like it deserves.

CX-9. The jury is still out but the redsigned model has seen a boost sales.

CX-3. In its first year it actually sold well relative to other Mazda's. Its the third most popular Mazda sold behind the CX-5 and Mazda3. It's probably cut into Mazda3 sales but hey its still a Mazda.

I would agree that the Mazda 6 needs the 2.5T.
 
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2014 Mazda CX-5 Touring AWD
Keep in mind that JD Powers dependability study of 2016 is on 2013 vehicles, where previous, Ford based Mazda 3 and Mazda 6 where sold.
Getting reliability up takes a long time and getting the buying public to be aware of this takes even longer.

For example, Subaru was producing all its cars essentially on the same engine (the EJ) and 4AT transmission for over a decade. It built a reputation of being very reliable. When they came out with a new engine (FB), everyone continued to assume it will be as reliable as the old EJ. Even Consumer Reports still recommended these cars, despite a relatively high percentage of engines which had oil consumption and despite a recall.
Subarus are still considered better in AWD than others, based mostly on reputation and not actual capabilities or hardware.

In order for Mazda to build its reliability reputation, it needs consistent quality for several years.

However, I am not sure this is the only reason for lack of retention. For example, some GM, Chrysler owners were happily going back despite low quality for years.
Perhaps one of the reasons is that when some buy a "fun" car, they do it with emotions and not based on careful weighing of the alternatives. For repeat customers, the car needs to make practical sense in addition to being fun. Also, if you value handling, you are a good candidate for a sports sedan/coupe, which typically implies luxury, something Mazda does not offer.

IMHO, Mazda must not only be more reliable, it needs to get best safety scores, best EPA efficiency and be practical for everyday use. For example, some people complain that visibility from the driver seat is not great. That needs to be fixed. In my CX-5, there is not nearly enough cubbies to put stuff in. People pay attention to these and will not buy a car for these 'silly' reasons.
 

yrwei52

2016 Mazda CX-5 GT AWD w/Tech Pkg
Contributor
:
Plano, Texas, USA
I'll throw in my 2 cents in Mazda's historic low retention rates and why its steadily improving. I'll just give 1 of many: Limited but improving Lineup.
Consider that Mazda's retention rate improved ever since the CX-5 came out. Prior to the CX-5, Mazda did not have a model to compete with the CRV, Rav-4, Escape, and Forester.
No, Mazda had compact SUVs prior to CX-5 competing with others, the Mazda Tribute and Mazda CX-7. They're just not good enough!

Mazda also does not have a pickup truck, a hybrid, a 2-door coupe, and a 4-seat convertible. Essentially consumers (not most but a substantial number) want such options and need to go elsewhere.
Mazda had Ford RangerturnedB-Series truck before 2010. Again, it couldn't compete with others. Mazda also has BT-50 pickup truck available in other markets since 2006. BT-50 just received an updated appearance to bring it in line with Mazdas current Kodo design language. Other than Toyota, none of others have a hot-selling hybrid. Sales volume on 2-door coupe and 4-seat convertible are very limited.

The Mazda6. The midsize sedan is a class where Mazda is hurting in both sales and retention. There's a big piece of the US pie that Mazda is missing mainly because Americans want reliable appliances. The other reason is only one engine choice. Mazda originally planned for the Sky-Activ Diesel model to arrive but has been delayed and thus hurt sales. V6 engines, turbos, and hybrids offered by other makes is killing into Mazda6 sales. Get the Diesel and turbo engines here and it should carve out a healthier niche in sales like it deserves.
Single engine platform for Mazda6 is not the killer for its sales. Hyundai Sonata started with single 4-cylinder engine platform and didn't hurt its sales at beginning. And now Sonata outsells Mazda6 4:1 in the US! V6 sales on Toyota Camry and Honda Accord are very minimum. 2-door coupe? Almost non-existent!

CX-9. The jury is still out but the redsigned model has seen a boost sales.
No, it's opposite. The sales on new 2nd-gen CX-9 is dismal so far since it came out in May for the US market. It can't even reach the sales figure of CX-9 in 2007 when it just came out as a new model! It sells barely under 2,000 units per month except in July!

CX-3. In its first year it actually sold well relative to other Mazda's. Its the third most popular Mazda sold behind the CX-5 and Mazda3. It's probably cut into Mazda3 sales but hey its still a Mazda. Man where would Mazda be without the CX-5 and CX-3?
CX-3 sales is not good since it came out in August 2015 for US market. So far Mazda sold a total of 23,317 units comparing to 114,976 Honda HR-V's sold which came out just two months earlier.
 
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16 CX-5 GT AWD w/ Tech
Mazda should just throw a 10 year/100000 mile warranty on their cars. Why not? Give people more incentive to buy their cars and a sense of comfort. Mazda has to prove their reliability and what better than to back their cars with a great warranty.
 
1

123373

The issue is comparing Mazda's quality compared to other Japanese makes. Hood shaking because the metal is too thin. Interior and exterior mirrors that vibrate. Interior rattles, seats that shake, wind noise, inferior infotainment These are things that are not acceptable in a 30+ SUV. Honestly it handles well and look great, but not enough to make me buy another one.
 

Kedis82ZE8

'15 CX-5 GT AWD, '12 GX 460, '07 G35x
Contributor
:
'15 CX-5 GT AWD
Mazda should just throw a 10 year/100000 mile warranty on their cars. Why not? Give people more incentive to buy their cars and a sense of comfort. Mazda has to prove their reliability and what better than to back their cars with a great warranty.

I wonder if the unlimited mileage warranty in Canada will be expanded to the US?
 

craigo

Contributor
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2014 CX-5 GT FWD, 2015 Mazda 3 Touring
The issue is comparing Mazda's quality compared to other Japanese makes. Hood shaking because the metal is too thin. Interior and exterior mirrors that vibrate. Interior rattles, seats that shake, wind noise, inferior infotainment These are things that are not acceptable in a 30+ SUV. Honestly it handles well and look great, but not enough to make me buy another one.

The vehicle has changed quite a bit starting with 2016 model year.

Also, hood and mirror shakes were resolved via TSB now several years ago - you could've gotten it fixed under warranty. It wasn't the metal but a combination of cowl design and some faulty adhesive in the hood structure. All car makes now use thinner metal to save weight.
 
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1

123373

The vehicle has changed quite a bit starting with 2016 model year.

Also, hood and mirror shakes were resolved via TSB now several years ago - you could've gotten it fixed under warranty. It wasn't the metal but a combination of cowl design and some faulty adhesive in the hood structure. All car makes now use thinner metal to save weight.

Was fixed per the tsb, lasted for a few months and returned. Gave up since it's a rattle bucket now as well. Suspension is now creaking and cheap skyactive rotors are warped again.
 
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13' CX-5 and 16' Mazda6 both Touring w/Tech/Bose
No, Mazda had compact SUVs prior to CX-5 competing with others, the Mazda Tribute and Mazda CX-7. They're just not good enough!

Mazda had Ford Ranger–turned–B-Series truck before 2010. Again, it couldn't compete with others. Mazda also has BT-50 pickup truck available in other markets since 2006. BT-50 just received an updated appearance to bring it in line with Mazda’s current Kodo design language. Other than Toyota, none of others have a hot-selling hybrid. Sales volume on 2-door coupe and 4-seat convertible are very limited.

Single engine platform for Mazda6 is not the killer for its sales. Hyundai Sonata started with single 4-cylinder engine platform and didn't hurt its sales at beginning. And now Sonata outsells Mazda6 4:1 in the US! V6 sales on Toyota Camry and Honda Accord are very minimum. 2-door coupe? Almost non-existent!

No, it's opposite. The sales on new 2nd-gen CX-9 is dismal so far since it came out in May for the US market. It can't even reach the sales figure of CX-9 in 2007 when it just came out as a new model! It sells barely under 2,000 units per month except in July!

CX-3 sales is not good since it came out in August 2015 for US market. So far Mazda sold a total of 23,317 units comparing to 114,976 Honda HR-V's sold which came out just two months earlier.

We're not talking about 2010 we're talking about now in 2016. Mazda currently does not have a pickup truck in the US market therefore anyone wanting a pickup will get a different make. That affects retention numbers big time. Pickups are still selling really really well in the U.S.

You're focusing on sales as opposed to looking into model retention which a small company like Mazda is holding on to. Example: The Mazda3 has had good retention for a couple years now. 54% for model years 2010-2013. https://www.nada.com/b2b/Portals/0/assets/NADA Perspective/2014/201402 Perspective Retention.pdf

You can have a total of say 10 sales and if 6 of those 10 buy another Mazda3 than that's a 60% retention score. Or you can have 6000 sales and if only 1500 buy another Mazda3 then the retention rate is 25%. Mazda wants to get up to 60% for the entire line. Yes improved sales are good but their higher goal right now is improved retention. As the article states.

Kogai's strategy aims to:

• Hold the line on incentives to boost transaction prices.

• Cultivate an upmarket aura around the brand with sporty handling, elegant interiors and sumptuous design.

• Improve the brand's low customer-retention rate to 60 percent.

Mazda wants to retain 60% of its existing customer base. Not having a pickup truck (one example) affects retention rates. Having a midsize sedan competing against Accord/Camry/Sonata/Altima with just one engine choice affects retention rates. The Sonata was has equivalent base engine and two turbo engines to choose from. If the Sonata only had that one base engine best believe their retention rate will suffer. The Accord has a V6 option in case anyone wants it. The Accord Hybrid is now Honda's best selling hybrid vehicle! So the Accord's got the base engine, sport, V6, and hybrid engines. Imagine if the Accord only had that base engine. Its retention scores will dip.
 
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2021 CX-9 Sig
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2014 CX-5 GT
Mazda should just throw a 10 year/100000 mile warranty on their cars. Why not? Give people more incentive to buy their cars and a sense of comfort. Mazda has to prove their reliability and what better than to back their cars with a great warranty.


Agree. That is what made Hyundai what they are today. Originally, they were the equivalent of Geo and Yugo. They slowly raised their prices and brought out the 10 year 100K warranty, which was unheard of at the time and people jumped at it.

I think Mazda should do a 5 year/50K bumper to bumper and a 10 year/100K powertrain.
 

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