Mazda Australia spokesman Steve McIver says there market research showed it is "not the right product for us right now". "Our customers are well served with our SUV range," he says.
The Mazda5 compact people-carrier has a more aerodynamic shape than the first model introduced in 2005, leading to a 15 per cent reduction in CO2 emissions from the new two-litre direct-injection engine.
There is also a 1.8-litre petrol engine, now with a six-speed manual gearbox, and a diesel engine. A highlight of the vehicle is its dual sliding rear doors and easy step-in access.
Meanwhile, Mazda Australia believes it will meet the new fuel economy and CO2 emissions targets to be announced by the Federal Government at the end of the month. Company boss Doug Dickson believes the format for the targets will be similar to Europe where average targets across a manufacturer's range are set.
"I am confident we will reach those targets even without Sky (Mazda's next-generation engines and transmissions)," Dickson says. "Sky is coming in 2011 globally and it's still to be decided when it will come here," he says.
"We put our hand up to get it as soon as we can, but we haven't been given a definite date yet."