The subcompact car segment is the country’s largest in terms of sales volume. It’s so important that the major players here offer a dizzying array of variants to fit just about every budget—Toyota has 11 variants of the Vios, Honda has 6 for the City, and even Nissan has 5 for the Almera. With that in mind, what drove Mazda Philippines to offer just two variants—a hatchback and a sedan for its 2020 Mazda2?

Previously, Mazda Philippines offered 6 variants—a combination of two body styles, two transmission choices, and three trims. Now, there’s just one variant—the Mazda2 1.5 Elite coming in a 4-door and 5-door form. What gives? According to Steven Tan, President of Bermaz Auto Philippines, the answer is quite simple: the implementation of the revised new vehicle excise tax or TRAIN in 2018.

“The implementation of TRAIN in 2018 pushed the price of the Mazda2 Premium Series above one million pesos,” says Mr. Tan. “This has caused a steep drop in demand.”

Admittedly, paying more than a million pesos for a sub-compact car is more of a luxury, making it niche. Instead, buyers in this segment opt for the mid-grade variants, as evidenced by the popularity of the Vios 1.3 E, City 1.5 VX, and even Mazda’s very own Mazda2 V+. With that, it’s down to a tale of simplification.

“With the introduction of the CX-8 and CX-30, we must reduce showroom complexity. Increasing showroom complexity stresses the sales consultant, and makes the buying decision more difficult for customers,” adds Mr. Tan.

Furthermore, Mr. Tan remains confident that the Mazda2 is speced right to compete in the subcompact car space. “Mazda2 customers are satisfied with the high-quality fabric seats, but they must have the Mazda Connect, so we included Apple CarPlay and Android Auto for 2020. With the refreshed KODO design, improved NVH, and G-Vectoring Control Plus as well, the Elite model exceeds the previous Mazda2 Premium Series, and yet the price is kept below one million pesos.”