Special Coverage

NADA Convention & Exposition

NEW ORLEANS – It’s no secret Mitsubishi Motors North America has had a rough ride of late in the U.S.

Fallout from a 0% financing program early this decade, when many subprime buyers defaulted on loans, hurt the auto maker’s image, sales and profitability.

Now the U.S. recession that began last year is keeping buyers out of most new-car showrooms, and Mitsubishi was one of the auto makers hit hardest in 2008. Total U.S. deliveries slid 24.6% last year to 97,257 units, Ward’s data shows, while overall industry sales declined 18.0%.

So how does a small auto maker like Mitsubishi survive in such a market?

“The answer is product,” says Ramsay Gillman, CEO of The Gillman Companies and owner of three Texas Mitsubishi stores.

“Mitsubishi has to use (its) finances wisely,” Gillman tells media here during the 2009 National Automobile Dealers Assn. convention. “(They need to) use their tremendous design and product-development (capabilities to) research and, as rapidly as possible, come up with an automobile that is truly a cut above, that separates itself out of the herd.”

Gillman says the vehicle needs to be a volume model that plays to the heart of the market, not a niche product such as a special-edition Eclipse sports car.

“We need a car that is mainstream, that the American public could say, ‘Hey, that’s the kind of car I’d like to buy,’” he says.

Gillman wants a car that has “a little pizzazz to it or styling to it or innovations in it or gas mileage to it or power that is above and beyond the Hondas or Nissans of the world.”

He says Mitsubishi needs to be “bold” in creating such a model and possibly subsidize the car’s sales. Subsidize is “a word they don’t want to hear of course,” but it’s a move that may be necessary for the brand’s survival in the U.S., Gillman contends.

Mitsubishi’s tiny i-MiEV may fit the bill of a car that will bring buyers into showrooms, he says.

The auto maker just put the electric i-MiEV in fleets in Southern California last fall and this year plans to retail the model in Japan.

“Short-term, the electric car or the hybrid car is not as hot as it might be, but I think as soon as those gas prices go back up, which they will, a franchise has to have” such a vehicle, Gillman says. “You’ve got to have that arrow in your quiver.”

He says Mitsubishi’s U.S. dealers are enthusiastic over the appointment of Shinichi Kurihara as MMNA’s new CEO in November. Kurihara is considered a product-development expert, having shepherded the Lancer sedan and Outlander cross/utility vehicle to market.

Previous MMNA CEO Hiroshi Harunari “was on a mission of controlling costs, and he did a good job,” Gillman says. But with “product-guy” Kurihara, “I feel some of our requests to him (are) not falling on deaf ears.”

cschweinsberg@wardsauto.com