Mitsubishi Expects to Rebound Alongside Broader Industry; Unveils New Outlander

NEW YORK – Mitsubishi Motors Corp. executives express a commitment to the North American market, despite major volume losses over the last 16 months.

Outlander Prototype provides hint of upcoming redesigned CUV.

Speaking at the introduction here of the next-generation Outlander midsize cross/utility vehicle, Mitsubishi Motors North America Inc. CEO Shin Kurihara tells journalists the auto maker plans to emerge from its malaise “a stronger, more relevant company.”

Acknowledging some car companies will not survive the industry’s worst sales downturn in more than two decades, Kurihara calls Mitsubishi “small, driven and nimble enough” to meet the new demands of North American consumers.

“I am here to tell you, Mitsubishi will survive and prosper,” he says.

However, Mitsubishi’s fortunes in the U.S., its largest and most important market outside of Japan, have fallen particularly hard in recent times.

Sales plunged 48.9% to 13,834 units through the year’s first quarter, from year-ago’s 27,081, according to Ward’s data, while market share dropped two-tenths of a point to 0.8%. Total deliveries in 2008 tumbled 24.6% to 97,257 units, from 128,993 in 2007.

“The brand has been sliding,” admits John Koenig, executive vice president, MMNA. “But we’ve stopped the slide and set the company up to be profitable at volumes of 4,000 to 5,000 (units) per month. We see ourselves surviving at that level, and then we’re going to start growing it back.”

Mitsubishi plans to leverage its expertise in all-wheel-drive systems, including emerging torque-vectoring technology, as well as continue to promote its involvement in off-road rally racing.

The auto maker also hopes to reap some momentum from its i-MiEV electric-car program. Sales of the plug-in EV begin in Japan this summer, with the first units rolling off the assembly line in July.

An i-MiEV prototype fleet is being tested by utilities in Southern California and Europe, and the auto maker announces today an additional partnership with Portland General Electric in Oregon. The car also is undergoing testing in Canada and Australia.

Koenig reports positive feedback from the California test fleet, noting drivers are becoming accustomed to the recharging process. The utilities have found if the drivers have a place to plug in at work, “people are plugging in, so they don’t have to pay for (the electricity) at home,” he says with a laugh.

Kurihara says the left-hand-drive i-MiEV sharing the stage here demonstrates MMC’s plans to roll out the mini EV globally, part of the auto maker’s Drive@Earth strategy for environmentally friendly vehicles.

The EV will be coming to the U.S., although Mitsubishi does not have a timetable. “I would say within a couple of years,” estimates Kurihara. Additionally, Mitsubishi is eying a gasoline version of the car, known as the iCar in Japan, for the U.S. market.

Koenig believes it will receive the same 3-cyl. engine Mitsubishi supplies to Smart GmbH for its Fortwo micro-subcompact.

Meanwhile, Koenig says anticipated redesigns of the Eclipse sport coupe and Galant midsize sedan, previously expected for the ’10 model year, remain in flux. He cites the current global financial crisis, which is pinching research and development dollars.

“They’ve been due for a redesign for a long time,” he admits. However, the auto maker remains relatively competitive with its current-generation Eclipse in what has become small segment.

With such great name recognition, Koenig says the auto maker is hesitant to discontinue the model. The Galant occupies the industry’s biggest segment, and Mitsubishi cannot ignore the car much longer.

“I’m pushing hard for a Galant replacement and just can’t say when its coming,” he says. “But I think the D-segment, with the Toyota Camry, Honda Accord and Nissan Altima, is the biggest volume segment in the market, so we need to be there. We are not going to walk away from it.”

Koenig says the future of the MMNA’s Normal, IL, assembly site remains intact, despite the company’s recent struggles in the U.S.

“We just signed a new contract for four years,” he says. “I understand their breakeven point now is lower than it’s ever been. So our intention is to keep the plant there, not shut it down, in the hopes that when the market comes back we’ll be ready for it. There is no plan to close it.”

Mitsubishi says the Outlander Prototype unveiled at the show, “provides strong directional clues” of the redesigned CUV, which starts production in October and goes on sale in November.

The Outlander receives a more aggressive exterior design, punctuated by the brand’s “jet fighter-inspired” grille. The new model also adds an available 40 GB entertainment system with hands-free capability.

The CUV’s optional aluminum 3.0L SOHC MIVEC V-6 engine gets a 10-hp boost to 238 hp and gains extra low-end torque for better performance under city driving. Base models equipped with the standard 4-cyl. feature “Idle Neutral Logic,” which automatically shifts into neutral at standstill to save fuel.

Mitsubishi is counting on the new Outlander to compete more aggressively with the Toyota Highlander and Honda CR-V.

[email protected]