Brands Create Customers

Mazda has announced that it will scrap all 4,700 Mazda vehicles on the car carrier Cougar Ace that almost capsized in the North Pacific. We previously reported on the brand challenge presented by the Cougar Ace ordeal here, and here.

After its harrowing mishap at sea, the Cougar Ace was stabilized and towed to port in Portland, Oregon. Many of the Mazda vehicles on board appeared to have survived the near-disaster with little or no damage. At the time, Mazda said it was considering selling the cars as “used” if they could pass thorough inspections.

Preserving brand trust

Now Mazda has decided that protecting the integrity of the Mazda brand comes first and foremost—an option we recommended in our first post. Mazda will not release the vehicles to the public.

As we stated in September:

Brand trust is really what’s at stake here. Mazda can’t afford to lose it. Those are not just 4,700 Mazda vehicles aboard the Cougar Ace. Those are now 4,700 unknowns, and question marks corrode brands.

And now, Mazda’s decision, from BYM News:

Mazda Motor Corporation has announced that all of the U.S. and Canada-bound Mazda vehicles from the car-carrying vessel, Cougar Ace, which nearly capsized off the Aleutian Islands in late July, would be scrapped.

“After thorough testing by engineers from our North American and Japanese R&D centers, we decided the most appropriate course of action – with our customers foremost in mind – was not to sell any of the 4,703 Mazdas aboard the ship,” said Jim O’Sullivan, President and CEO of Mazda North American Operations, based in Irvine, Calif.

And:

O’Sullivan added that although some of the Mazdas aboard the Cougar Ace showed little or no visible damage from being tied-down at severe angles for an extended period, the potential for future problems led the company to reconsider its initial decision to sell any of the vehicles as used.

“We always put the customer first,” O’Sullivan continued. “This drove our decision to scrap every one of the Mazdas involved in this incident.”

Mazda News Release.

Brand leadership rescues the brand

This decision from Mazda shows brand leadership at its best. As we wrote back in September:

Mazda has greatest brand leverage if it can negotiate a full value settlement for the entire shipment from the shipper and insurers. This would enable Mazda to affirm that these vehicles were effectively “lost at sea,” and will be kept off the market to protect the customer, and the brand. The brand logic behind this strategy is that these vehicles have the taint of damaged goods. If allowed into the market they could spread doubt across the entire Mazda brand, disrupting future sales and re-sale values, even if the salvaged cars were to show no outward defects. The mere belief that random Cougar Ace vehicles are “out there” could haunt the brand for years.

Bottom line: from a near disaster at sea, Mazda has clearly and courageously rescued the brand.

This entry was posted on Tuesday, December 19th, 2006 at 9:19 pm and is filed under Brand Leadership, Brand Value. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.