Europe

Corporate planning, sales and marketing and customer service functions in Europe have been transferred to MME (LEV) GmbH, a newly established subsidiary of MME, based in Germanyhe largest market in Europe.

Continued economic recovery in Europe was reflected overall by a 9.1% rise in total industry sales of passenger cars. Demand in Italy was particularly buoyant as a result of scrap incentives introduced by the government in early 1997.

   Boosted by the introduction of the new 626 series along with the reinforcement of product competitiveness of existing models, Mazda's European sales increased by 8.0%, to 214,983 units. Double-digit sales growth was registered in almost all markets, including the United Kingdom. In Germany, where competition was fierce, Mazda posted a 6.1% increase in sales. As a result, Mazda attained a 1.4% share in the European passenger car market. From January to May 1998, the 626 series was the segment sales leader among Japanese models in Germany, Austria and Switzerland.

   In fiscal 1999, Mazda will concentrate on sustaining growth in sales volume, with the spotlight on the highly successful 626 five-door hatchback, four-door sedan and station wagon models.

As reflected by its rising popularity among European customers, the new Mazda 626 series successfully redefines the concept of the "mid-size" car in such areas as physical size, aesthetics, vehicle dynamics, value and lasting quality - giving ta whole new meaning to passanger comfort and functionality. The station wagon model shown here was additionally introduced in the European market in February 1998.

   The new MX-5 and Demio, available in Europe from April 1998 and from August 1998, respectively, should also have a positive impact on sales. Meanwhile, marketing plans for the European launch of the new 323 and versions of the 626 and new 323 with new direct-injection turbo diesel engines are well under way.

   As part of our efforts to strengthen European operations, as a whole, Mazda is currently implementing a pan-European marketing strategy designed to further raise brand image and customer satisfaction levels. Mazda will also strengthen the dealer network and improve the financial condition of the dealers, while working to expand business in southern and eastern Europe. Mazda aims to achieve a 2% share of the European market by the year 2000 and the No. 1 customer satisfaction ranking.

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