[Takashi Yamanouchi, Representative Director and Chairman of the Board, President and CEO]

Good morning everyone.
I would like to thank you for taking the time to join us here today for the launch of the Mazda CX-5. The CX-5 is an important model – symbolic of the reborn Mazda, it is the key to our future, and you could even say that the fate of the company depends on its success. Today, as we kick off sales of the CX-5, I feel the high expectations for this model and at the same time a sense of tension. Today I will be talking to you about the significance of the CX-5 for Mazda, and then I'll hand over to one of our experts to tell you about some of the CX-5's key features.

We are launching the CX-5 in the crossover SUV segment, a segment showing rapid growth all over the world. With an annual sales target of 160,000 units, we plan to develop the CX-5 as one of our core models, following on from the Mazda 3, Mazda 6 and Mazda 2. We have already started shipments to various regions, and will be commencing sales in Europe, North America and Australia at roughly the same time as Japan. The response to this model is already excellent – even prior to launch, the CX-5 has already won three awards, adding to the 25 awards that SKYACTIV TECHNOLOGY has won globally to date.

I have already announced Mazda is currently undergoing a spectacular structural transformation encompassing R&D, production, sourcing, sales and all other business areas, for the first time in its 90-year history. The model that demonstrates the results of the three innovations that we have undertaken to date is the CX-5.

The first innovation is SKYACTIV TECHNOLOGY. In this day and age, being environmentally-friendly is a given. Our aim is to offer all customers who drive or ride in our cars outstanding environmental and safety performance together with driving enjoyment, which is, after all, the original attraction of the car. It was Mazda's passion that propelled the development of SKYACTIV TECHNOLOGY. We examined every part of the car, from engine and transmission to body and chassis, and went back to square one in our pursuit of the optimum structure and ultimate efficiency. And the first model equipped with the full suite of SKYACTIV technologies as well as our new KODO design language is the CX-5, heading Mazda's new generation of products.

In launching the CX-5 in Japan, the fact that this model will be equipped with our new generation clean diesel engine SKYACTIV-D holds particular significance. The diesel CX-5 boasts fuel efficiency of 18.6km/L, leading all SUVs on sale in Japan, together with maximum torque equivalent to a 4-liter, 8-cylinder gasoline engine. I am often asked whether we have any chance with this model in Japan, where the ratio of diesel models sold is not even 1%. However, people who have driven the CX-5 tell me that the driving performance will change people's image of diesel cars, and when I drove it, I was enthralled by the quietness, the tenacity, and the overwhelming acceleration of this car – the best I've felt in over 40 years of driving Mazda cars. And together with the convention-breaking performance and fuel efficiency of the SKYACTIV-D engine, the strategic pricing and the favorable tax breaks and subsidies, I am certain that this is a winner. Hiroshima Prefecture is currently examining the introduction of tax breaks for clean diesel vehicles. I anticipate that this kind of support for clean diesel cars will also spread to other prefectures.

With the CX-5, we are offering our customers who want excellent driving and environmental performance a new alternative, a third choice that is not an EV or a hybrid. We forecast sales in Japan of 1000 units/month, of which over 50% will be diesel. We are up to the challenge to achieve this target.

Our global sales target is 160,000 units annually, and of that 12,000 will be sold in Japan. What this means, in other words, is that we will export over 90%. You may be wondering whether this will be profitable for us, with the current strong yen. One answer to that question is our second innovation, Monotsukuri Innovation. The fruits of Monotsukuri Innovation are incorporated in this model, and will be included in all models launched from now on.

SKYACTIV TECHNOLOGY was the innovation of the car itself. With Monotsukuri Innovation, we have drastically reviewed the way a car is built. The aim of this activity was to achieve economies of scale at the same time as developing the capability to respond to diversifying needs. It is a cross-functional structural transformation that goes beyond production processes to cover R&D and purchasing as well. Corporate resources were prioritized, and with support from many suppliers we poured all our efforts into this activity.

Forming the Monotsukuri Innovation's base is Bundled Planning. This is our unique planning method, where we forecast the products and technologies that will be in demand in the future, then develop common product and technology plans for the next 5-10 years. Based on those plans and our Common Architecture concept, we use a common process to design products with diverse characteristics, which are then produced efficiently and flexibly using our Flexible Production method.

I'd like to give you an example using the SKYACTIV engine. First of all, we developed common plans for all engine variations required globally up to 2015, enabling the same fuel consumption properties for all engine sizes. By doing so, we were able to significantly reduce both development costs and time. On the production side, we ensured that all engines could be processed on the same line, whether gasoline or diesel, large or small displacement. As a result this means that even if sales of diesel models exceed expectations, we can handle the changes flexibly while maintaining a high level of efficiency. Additionally, by switching most machines on the cylinder block processing line to generic machines, the previous 45 processes were reduced to a mere 4, leading to huge reductions in SKYACTIV engine investment.

Our Monotsukuri Innovation activities over the past five years have led to the achievements that you can see here, in the areas of development efficiency improvements, cost innovation and increased efficiency of production facility investment.

Our SKYACTIV products are gradually becoming the enablers for our third innovation, our sales site innovation. For example, in markets where SKYACTIV models are already on sale, we have set prices that match with product attributes and are working on raising residual values, to gradually enhance the trust and satisfaction levels of our customers. We are following the marketing principle of '4Ps' – Products, Price, Place and Promotion – and with these four elements fully functional, we will further raise Mazda's brand value. At our dealerships, we will continue to build close relationships with our customers and implement various initiatives including CRM and other service improvement activities, so that we become a brand with a presence that is understood and loved by our customers.

Needless to say, the key element supporting a brand is people. In addition to sales staff training, we are deeply aware that the approach and actions of each and every Mazda group employee involved in R&D, production, sourcing or sales is an embodiment of the brand, and we will continue in our efforts to improve the brand value.

While today is the start of sales of the CX-5 in Japan, the diesel engine model will be available for customers from the end of March. Pricing is shown here. We have set up another opportunity next month to tell you about the CX-5 marketing initiatives and sales status.

With the yen at a record high level, some even say that the business model of exporting cars produced in Japan may become obsolete. In these severe conditions, many manufacturers are considering a new type of Japanese manufacturing. Using the superlative attributes of SKYACTIV TECHNOLOGY, cost structure innovation through Monotsukuri Innovation, and the enhancement of the brand through the innovation of sales sites, Mazda is pressing ahead with structural reform, to ensure that exporting from Japan is profitable. Mazda group employees throughout the world will continue to working together to address this, the ultimate challenge.

The CX-5 that we are launching today is a very important model for Mazda. My commitment to you here today is that we will definitely succeed!
Thank you.