Mazda is streamlining production of its best-selling CX-5 crossover for the 2026 model year, making deliberate cost reductions in areas where executives believe customers won’t notice. These moves come as the company aims to maintain profit margins despite new tariffs and a competitive market. The new CX-5 will launch with a larger footprint, an upgraded infotainment system, and hybrid options but will also feature subtle downgrades in materials and construction to lower expenses.
Strategic Cost Management
Mazda’s chief financial officer, Jeffrey Guyton, revealed that the company worked closely with Nippon Steel early in development to reduce steel costs for the CX-5’s body structure. The third-generation CX-5 is 115mm longer and 15mm wider than the previous model, yet Mazda has managed to lower production costs through materials optimization.
The company is also making changes to interior details. For example, the leather wrapping on the steering wheel will no longer be precisely cut and stitched to align horizontally; instead, it will use a less expensive angled stitch pattern. Executives justify this by stating that customers don’t value the more meticulous approach enough to justify the additional expense.
“We put money where the customer is going to see it, and we’ve tried to find big cost efficiencies where the customer doesn’t value it as much or won’t see it.”
—Jeffrey Guyton, Mazda CFO
These unseen cost cuts are part of a broader strategy to keep margins high, especially as the CX-5 faces a 15% tariff in the US market. Mazda posted a loss for the first nine months of its current fiscal year, but expects a full-year operating profit.
Technology and Performance
Despite the cost-saving measures, the 2026 CX-5 will feature significant technology upgrades. It will be equipped with a massive 15.6-inch infotainment screen with Google Built-in, including Google Maps and Google Assistant. The vehicle will also offer a fully digital instrument cluster and a panoramic sunroof for the first time.
The initial launch will include a carryover 2.5-liter four-cylinder engine, although power output has been reduced slightly to 132kW and 242Nm. The turbocharged version has been discontinued for now, but Mazda plans to introduce a hybrid powertrain in 2027. The hybrid version is expected to match or exceed the performance of the former turbo model, catering to the growing demand for hybrid vehicles, especially in markets like Australia.
Market Position and Timing
The CX-5’s production began in December for Europe and January for the US, with Japan following in April. Australia will receive the new model in mid-2026.
While the CX-5 has consistently been among the top three best-selling vehicles in its segment for the past 13 years, it now faces stiffer competition from models like the Toyota RAV4 and Mazda’s own CX-60. The company is banking on its cost-cutting measures and technology upgrades to maintain its market share.
The 2026 Mazda CX-5 demonstrates a calculated balance between customer-facing improvements and behind-the-scenes production efficiencies. This strategy positions the vehicle to remain competitive in a challenging automotive landscape.
