Be Cool, Japanese-Style

Native Detroiter David Schembri is back in Motown heralding plans to revive battered Mitsubishi Motors North America.

His goal as its executive vice president-sales and marketing is to “rebuild the brand one product at a time,” starting with the redesigned '06 Eclipse sport coupe. He has work to do.

On the day of his comeback proclamation during dinner with auto journalists, news was characteristically bad for Mitsubishi. It posted a fiscal year loss of $4.39 billion, worse than the previous year, which was dismal enough.

Mitsubishi sold 162,279 vehicles in 2004, a hair-raising 37% drop compared with 2003. The previous-generation Eclipse was the poster vehicle for that dive without a parachute. Eclipse sales in 2004 were 19,361 compared with 38,857 in 2003, a 50% decline.

“We need to reconnect with what Mitsubishi stands for in the U.S.,” says Schembri, whose 30-year automotive career started at the former American Motors, with stops at Volkswagen of America and Mercedes-Benz USA before arriving at Mitsubishi in February.

Part of reconnecting is getting juices flowing through the dealer network again.

Mitsubishi dealers started losing money in early 2003 because of slow sales and excess inventories. They reacted by cutting advertising, turning to other brands in their portfolios and generally losing interest in Mitsubishi.

Schembri says he and Rich Gilligan, Mitsubishi North America's CEO of six months, “have been relentless in meeting with dealers and explaining our philosophy.” It is this: Whereas some Japanese auto makers downplay their national heritage, Mitsubishi plans to flaunt it.

“The soul of our brand is Japanese,” says Schembri, his Italian heritage notwithstanding.

Mitsubishi marketers hope to ride a new-age wave called Japanese Cool or J. Cool.

It stems from Japan as an emerging cultural superpower. J. Cool is Pokemon and Iron Chef, magna graphics and Kill Bill samurai-inspired movies, trendy fashions and crisp architecture.

“You see the Japanese influence virtually everywhere,” says Schembri.

Cue the '06 Eclipse, accompanied by a new slogan (“Driven to Thrill”) and an ad campaign of a kind “never before seen in automotive advertising,” says Schembri.

In the TV spots, the Eclipse makes its entrance after a percussion group performs a prelude of time-honored Japanese drumming known as taiko. Your typical drum roll, it's not.

Previous Mitsubishi ads (to a techno-pop beat) targeted the youth market. Those ads were clever but limited because, even though a lot of young people are out there, “the truth is it's a narrow customer base,” says Gilligan's predecessor, Finbarr O'Neill.

The new Eclipse's target market is “Generation E” or “Generation Everyone,” quips Schembri. “We want to appeal to attitude and lifestyle rather than age and income.”

Despite the troubles Mitsubishi has seen, it apparently has escaped the notice of North Americans whom the auto maker polled. Only 25% of them knew Mitsubishi was in the news of late. Of those, 11% said the news was good and 11% said it was neutral. Only 3% correctly said the news was bad.

That may be a sad commentary on public knowledge, but it is blissfully good news to Mitsubishi, suggesting that what people don't know won't hurt brand image.

Schembri speaks enthusiastically of “a new beginning” for Mitsubishi. He also speaks nostalgically of his Detroit roots. He is at home in Detroit, even though he just bought a house near Mitsubishi Motors North America headquarters in Cypress, CA.

“I still have relatives in Detroit,” he says. “It's the only place I can travel to where I don't have to stay at a hotel.”

Steve Finlay is editor of Ward's Dealer Business.