Mazda is reworking the economics of its next-generation CX-5 in a bid to shield margins from mounting tariff pressures and return to full-year profitability. Case in point, the Hiroshima-based car brand has introduced a series of cost reductions on the third-generation Mazda CX-5 that customers are unlikely to notice.
According to Mazda’s Chief Financial Officer Jeffrey Guyton, one key example of the cost reduction involves simplifying the stitching pattern on the steering wheel. The outgoing model used curved stitching to keep seams horizontally aligned, an intricate process that increased production costs. The third-generation CX-5 adapts a simpler angled stitching pattern similar to its competitors, using the same leather material but at a lower cost. At the same time, Mazda increased spending on features deemed more valuable to customers. These include installing a larger center display with Google-based connectivity and enhanced voice recognition.
Savings were also achieved in the steel body structure through early coordination with Nippon Steel, cutting both weight and cost while increasing body size. Guyton described the move as part of Mazda’s strategy to “put money where the customer is going to see it,” while trimming expenses in areas that do not outright influence buying decisions.
The careful cost-cutting strategy comes as Mazda navigates a 15% United States tariff and forecast net tariff of ¥162.5 billion (or roughly P60,937,5000,000 in today’s exchange rate) for the fiscal year which will end on March 31, 2026. For Mazda, the CX-5 is critical to that effect. The model accounts for roughly a quarter of the brand’s global sales and recorded about 350,000 deliveries in the previous fiscal year. For many Japanese car brands like Mazda, a fiscal year starts from April 1 of the current year and ends on March 31 of the following year.
Aside from navigating the imposed tariff, the company also needed to realign its overall business strategies. Its latest financial results show operating profit fell 32% to ¥30.8 billion (or around P11,550,000,000 in local money) in Q4 of 2025, while net income dropped 45% to ¥30.6 billion (around P11,482,800,000 in today’s exchange rate). On top of these, Mazda’s global sales in Q4 of 2025 also went down by 7.7% to 311,000 units.
One contributing factor to this decline was the CX-5’s delayed European production. CEO Masahiro Moro said ensuring the CX-5’s smooth rollout is the company’s top priority. European production was delayed six weeks to complete extended quality verification, particularly for more sophisticated software systems. Mazda expects the new CX-5 to support improved margins through stronger pricing power, lower incentives, or higher volume.
Autocar’s Take
Mazda’s CX-5 cost-cutting measure reflects a disciplined approach to product planning under financial strain. Instead of stripping visible equipment or raining prices outright, the company is targeting production inefficiencies that do not influence purchase decisions. Hat distinction matters. In a tariff-heavy environment we are all living in right now, protecting perceived value while quietly defending margins may be more sustainable that aggressive cost-cutting or incentive spending.
The risk, however, lies in execution. With profits already under pressure, and the CX-5 representing a quarter of Mazda’s global sales, any launch misstep could magnify financial strain. One takeaway here is that Mazda’s strategy of careful and calculated cost-cutting without sacrificing product quality is a good case study in implementing clear-eyed cost engineering.
