American unit thrives despite problems in Japan Despite troubles at its parent company and a potential scandal at home, Mitsubishi Motor Sales of America managed to have yet another record-breaking year, reporting its best 10 months in the company's 18-year history this past October.

"In the U.S., last year we had a 37% sales increase," reports Executive Vice President and Chief Operating Officer Pierre Gagnon. "We're going to finish this year somewhere between 20-25% ahead of last year so that's almost 70% in two years."

It's a far different story back home in Japan where MMSA's parent company, Mitsubishi Motors Corp., was humiliated by revelations that it hid consumer complaints for some 30 years regarding defects that would have resulted in recalls. Mitsubishi's president, Katsuhiko Kawasoe, resigned due to the scandal and was replaced by Takashi Sonobe. Continuing financial problems caused Mitsubishi to sell 34% of the company to DaimlerChrysler AG.

Then, a report emerged in September that some Mitsubishi dealers in the north and southeast regions of the U.S. were filing phony retail delivery records, claiming a car had been sold when in fact it had not. Mr. Gagnon refutes the allegations, calling the incidents isolated and saying the problem has been resolved. "It's forced us to really have a close look at our entire reporting system, which has been good," he says. "When you look at our Polk figure, when you look at experience, we are definitely inline with the rest of the industry in terms of our accuracy of reporting."

MMSA currently is the bright spot in Mitsubishi's dark times. "We are now leading Mitsubishi in terms of profitability," Mr. Gagnon says.

He attributes Mitsubishi's American success to a variety of factors, but singles out dealers especially, citing NADA scores that place the company in the top third of the industry in dealer attitude. Mr. Gagnon credits increased dealer participation as the reason its order-to-delivery initiative has been a success, cutting "millions and millions in expense," says Mr. Gagnon. The web-based ordering system has been embraced by dealers and inventory is being turned more quickly. As a result, the dealers have had fresher product to sell.

"We have gotten much better at demand forecasting," says Mr. Gagnon. "We've got 550 forecasters called dealers, so they have a lot of say in what we bring in and we have tremendous communications through our regional marketing process where we continuously get input from them. It's really the old saying, trying to get the right car, at the right place, at the right time."

Although he says there's no "silver bullet" to account for Mitsubishi's success in the U.S., Mr. Gagnon believes its product is the best it has ever been. Year 2000 sales were fueled by the new Montero luxury SUV and the sporty Eclipse Spyder, the convertible version of the popular Eclipse.

Looking ahead, Mr. Gagnon says beginning in 2001 and for the next five years Mitsubishi will launch a new product every year. On tap for 2001 is the all-new Lancer, the successor to the Mirage.