Seven men in white lab coats are scraping the sides of a life-size car model, rapidly transforming a massive lump of clay into a sleek form with the silhouette of a sporty coupe. Thin shavings fall to the floor as the designers mold shapes to resemble those of the giant sketch of the car hanging above them on the wall. All the while, Franz von Holzhausen, Mazda's (MZDAF) tall, tow-headed director of design for North America, is watching intently.
But Holzhausen isn't supervising designers at the company's hush-hush research and development facility in Irvine, Calif. Instead, the project is unfolding publicly at a dramatic pace on the floor of the Los Angeles Auto Show—almost like a theatrical performance. The normally tightly controlled, top-secret process of creating a full-scale show concept is, for the first time, on display for the dozens of spectators crowded into the booth.
The unusual spectacle is Holzhausen's latest attempt to put design front and center of the Mazda brand. Since taking the reins of the company's North American design unit in February, 2005, he has forged a unique strategy, emphasizing slick concepts rather than real-life products to establish a new, sporty, and ultra-stylish image for the Japanese carmaker. Attempting to bolster its reputation as a maker of fun-to-drive vehicles such as the Miata roadster, Mazda has shown attention-grabbing and award-winning concept cars at major auto shows in Los Angeles, Detroit, and Tokyo at a faster pace than any other manufacturer since early 2006.
Holzhausen's concepts—with Japanese names like Ryuga, Kazai, and Taiki—all share his Nagare design philosophy, which highlights sleek, low-slung, sports-car qualities. A Japanese word that translates roughly as "flow," Nagare is intended to produce cars with organic lines that give the impression of motion. And according to some analysts, Holzhausen could be using the series of clay models to lay the groundwork for a major shift in design for production models too.
Speeding Up Lagging Design
In the past few years Mazda's financial footing has remained solid. So far this year sales are up about 10% in the U.S. And in March, based on record worldwide profitability, the company outlined an ambitious new growth plan that would see sales rise to 1.6 million cars a year globally, increasing its annual operating profits to $1.7 billion by 2011. Wanting to ensure that design played a key role in this expansion, Holzhausen left General Motors (GM), where he had spent five years as a design manager and where he was responsible for well-received, low-volume sports cars such as the Pontiac Solstice and the Saturn Sky. At Mazda, by contrast, he works on a rapidly expanding lineup that includes everything from micro-hatchbacks to full-size crossovers.
On arrival at Mazda, Holzhausen immediately set out to gain attention. He rapidly released a series of concepts to help establish Mazda—which sells far fewer vehicles in the U.S. than either Toyota (TM) or Honda (HMC)—as a forward-thinking brand. The tactic worked. The vehicles, which each take between six months and a year to make, have generated a great deal of industry enthusiasm, often becoming the talk of the auto shows where they are introduced and landing on the cover of popular consumer car magazines like Car and Driver. The Kabura design won the venerated Aesthetics & Innovation Award at the January, 2006 North American International Auto Show in Detroit.
What really sets Mazda's concept vehicles apart from those shown by other manufacturers is that they aren't intended to preview future production models. Instead, the designs are meant to influence, but not dictate, the look of future Mazda vehicles.
In this, Holzhausen's strategy is significantly different from other automotive design studios, which lay out the big budgets necessary for prototypes only if they will have direct influence on production vehicles The designer says that the tack is crucial for a brand whose customers routinely rank "style" as one of their top three reasons for purchasing a car. "Our idea is to shape the design philosophy first and then put it into the product later," he says.
Holzhausen's strategy isn't without potential drawbacks. It could, for one, leave Mazda fans and owners wondering if there's a disconnect between imagination and reality. According to Wes Brown, president of the Los Angeles-based automotive marketing firm Iceology, car consumers have gotten savvier about the way the auto business works. "While they appreciate and understand the need to have true concepts," he says, "for the most part they prefer to see concepts that are an indication of what might come out, something to get excited about."
Indeed, other companies regularly use the cover of concept vehicles to test public reaction. Chrysler pioneered the tactic, showing a concept version of its popular Viper muscle sports car in 1989 and eventually basing the decision to produce the vehicle on an enthusiastic public response. The car has been a best-seller ever since. Since then, companies from Toyota to Hyundai (HYNDF) have also regularly tested the waters of public opinion with concept cars. And earlier this year, Ford was deluged by angry fans when it announced it wouldn't produce a version of the Interceptor sedan it had shown in January at the North American International Auto Show in Detroit.
Holzhausen says the influence of the concepts will eventually be apparent. The tight-lipped design chief, when asked which of Mazda's newer models currently on the market exhibit his influence, responds curtly, "None." Then again, he says that because of the long lead time necessary to the design and manufacturing of autos he has had only cosmetic influence on newer vehicles such as the CX-7 and CX-9 crossovers or the mid-cycle restyling of the Tribute sport-utility vehicle. Those models, produced under the previous design regime, have proved to be popular sellers—without Holzhausen's influence.
Design in the Time of Profit
Another big factor in the brand's continued success has been the "Zoom-Zoom" U.S. marketing campaign that began in 2000 and branded Mazda cars as zippy and fun to drive. "It really became a catalyst for the brand, standing for the emotion, the styling, the driveability," says Iceology's Brown. "It took a little while, but that has really led to their success."
But to make its sales targets and to stave off competition from brands including Pontiac, Subaru (SBUOF) and Mitsubishi (MMTOF), all of whom are looking to claim ownership of the sporty, fun category, Mazda will have to move beyond its slogan. Holzhausen's concepts may be laying the ground work for a drastic shift in design for Mazda, a prelude serving to avoid alienating loyal customers with too radical or sudden a change. "Breaking away with design is almost the only way for Mazda to differentiate [itself from] those other brands," says Brown.
Moving cautiously could be wise. Other auto companies that have made sudden, radical design shifts have suffered. When BMW (BMW) head designer Chris Bangle unveiled a radical new version of the staple 7 Series sedan in 2002, fans and owners were outraged. Many even changed their brand allegiance from BMW to Mercedes-Benz (DAI) or Lexus. Holzhausen could be attempting to avoid such backlash with his new concepts. "If they are planning a rather dramatic shift in design, this may be their way of warming us up to it," says Brown.
Eventually connecting Holzhausen's concepts to future models will be crucial for Mazda to prove that its cars are stylish and ultra-sporty in the real world. If the forward-thinking design on display in the concepts doesn't materialize in showrooms, customers just might walk away. After all, even in the theatrical realm of auto shows, a spectacle like live concept design doesn't reshape a brand.
View the BusinessWeek.com slide show of Mazda concept models.