Mitsubishi Looking to Return to 100,000 Annual Sales in U.S.

DETROIT – Mitsubishi Motors North America is setting its sights on a return to 100,000-unit sales in a calendar year, after suffering a severe drop in volume in recent years, a top executive says.

“I’d say (we’ll hit the mark) probably within three years,” John Koenig, executive vice president-MMNA, tells Ward’s during his recent visit here.

Mitsubishi sold 53,986 vehicles in the U.S. last year, 44.5% below 97,257 in 2008, Ward’s data shows. Volume in 2008 fell 24.6% from 2007, which was the last year the auto maker exceeded 100,000 units, with 128,993 deliveries, for an 8.8% gain on 2006.

Mitsubishi’s U.S. volume was 345,111 as recently as 2002, but sales quickly tumbled due in part to problems with a 0% financing scheme.

In an email to Ward’s, former MMNA CEO Pierre Gagnon blames recalls and mismanagement for Mitsubishi’s woes. “Two recall scandals in Japan and the resultant DaimlerChrysler (AG) management control of (Mitsubishi Motors Corp.) are probably the two biggest factors that led to the demise of Mitsubishi Motors in North America and around the world,” he says.

The former DaimlerChrysler purchased a 34% stake in MMC in 2000, divested shares throughout the early part of the decade and in 2005 sold its remaining 12.4% stake.

Koenig blames much of Mitsubishi’s 2009 loss, one of the U.S. industry’s worst years, on a sharp reduction in the number of vehicles sold to daily rental companies, primarily made up of Galants and some Lancers.

Refreshed ’10 Outlander to boost sales.

While the auto maker intends to continue fleet sales, it will do so in “a very small way,” he says.

Instead, Mitsubishi is focusing on building retail sales, which Koenig and other executives know is not easy for a low-profile brand that has found itself at death’s door, both here and in Japan, in recent years.

“We’ve assured (our dealers) we’re not leaving the North American market,” Koenig says. “That’s probably their biggest fear, because they’re reading about it in various journals.”

Some progress to reverse Mitsubishi’s decline was made late last year, he notes, with sales of 4,357 vehicles in December building on November’s 2,923.

The auto maker expects most of its near-term retail growth to result from marketing efforts for the Lancer compact car and ’10 Outlander compact cross/utility vehicle, as well as select new vehicles.

“They are very competitive compact products in their segment; they’re feature-packed,” MMNA spokesman Maurice Durand says of the Lancer and Outlander. “We have to work hard to enhance their perception and desirability.”

Koenig admits Mitsubishi has “neglected” to properly promote its Lancer Sportback variant, which launched last year and says the car will be the focus of marketing efforts this year, along with the refreshed Outlander.

Dealers have been clamoring for Mitsubishi to get back into advertising, and this year the brand has purchased spots on network TV, as well as cable channels ESPN, HGTV and Animal Planet, Koenig says.

Dealers also have been anxious for new product, and Koenig says they have come away impressed after seeing some of what’s in the pipeline.

This includes a version of the RVR compact CUV, going on sale here this fall. The CUV slots below the Outlander in size and will feature a 2.0L 4-cyl. engine and other fuel-efficiency efforts, including Mitsubishi’s first application of electric power steering.

The production RVR, which will bear a different name for the U.S., will be unveiled at the New York auto show in April.

Mitsubishi’s well-publicized foray into electric vehicles also will bring the i-MiEV small car to the U.S. in 2011. MMNA CEO Shinichi Kurihara cautions volumes will be small, with sales dictated by infrastructure readiness. “We cannot spread nationwide from the first or second year.”

Two years after i-MiEV’s launch, Mitsubishi is planning to bring the production version of the PX-MiEV unwrapped at last year’s Los Angeles auto show. The plug-in hybrid CUV is expected to overlap the Outlander in size, Durand says.

MMNA also is considering bringing the Japanese-market “i” minicar, on which the i-MiEV is based, as well as the next-generation Colt subcompact. The Colt, assembled in Europe, Japan and Taiwan, is set for a redo in 2012.

The auto maker is hoping this new range of product will attract buyers from defunct U.S. brands, such as Pontiac. Kurihara sees Pontiac’s brand image similar to Mitsubishi’s, as both have a youthful and sporty-driving slant.

The CEO says he intends to make sure Mitsubishi’s image maintains its appeal “to the younger people…that’s my goal.”

Kurihara says the average age of the Lancer and Outlander compact lineup is 35, relatively young for the mature U.S. market.

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