The newly launched Familia "Sport 20" top-end model expresses Mazda brand personality while improving features and quality of the Familia line-up.

During fiscal 1999, domestic industry sales in Japan dropped 6.5% to 5,867 thousand units due to the continued weakness in private consumption brought about by prolonged economic stagnation throughout the country. Sales of new micro-mini vehicles have, however, shown positive results due to the revision in the classification standard.

With a marginal decrease in retail sales of 2.2%, to 314,486 units, the introduction of new models and various sales promotional measures supported an increase in market share to 5.4% in fiscal 1999, up 0.3 percentage points from 5.1% in fiscal 1998. The newly introduced models during fiscal 1998 and 1999, including Familia, Capella Wagon and Roadster, posted substantial increases in retail sales. In the four years since its introduction, Demio has continued to enjoy positive sales performance; Carol, supported by a popularity of micro-mini vehicles, also recorded higher sales over the previous fiscal year.

Widely celebrated for its "fun-to-drive" appeal, the new RX-7, launched in January 1999, turns heads with its powerful, unique exterior and compact, lightweight, high-powered rotary engine.

With respect to fiscal 2000 achievements thus far, several new models have been introduced into the Japanese market, including the Premacy, MPV, Bongo and Familia Sport 20. These new models have received favorable response to date, with orders for MPV in the first month at three times the monthly target.

As a part of efforts to take advantage of the introduction of these attractive and innovative vehicles, Mazda will execute new marketing and sales approaches fully integrated with our brand strategy in the domestic market. The launch of the Premacy and MPV models, augmented by advertising campaigns and concerted promotion of these models, has changed the Mazda brand image in Japan reflected by increases in showroom traffic and greater customer access of information on these models through the Mazda internet website. Furthermore, the full-year contribution of newly introduced micro-mini vehicles and the new Familia introduced in fiscal 1998, combined with the continued popularity of Demio, are expected to boost sales in fiscal 2000.

The new Bongo van/truck has a cab-over body type with the engine located under the front seat and offers outstanding maneuverability along with best-in-class cargo space.

Various programs to assist dealerships are being implemented in Japan. Our first priority in the domestic market is to rebuild our sales companies and restore profitability. Concurrently, active efforts are being made to rationalize the dealer organization in Japan based on Mazda's "One-Operation" dealer program as well as boost sales through our Sales Promotion Program. In addition to these measures, Mazda is also promoting sales activities of commercial vehicles, advancing sales through the Internet and providing various sales tools to our dealers in Japan.

Aiming to attain the top position for customer satisfaction, the Company and its sales companies are implementing fully integrated customer satisfaction (CS) promotion measures throughout the country. Mazda's mid-term target is to attain annual retail sales, including micro-mini vehicles, of 500,000 units, or 7% market share.