Mitsubishi Follows Hyundai Formula

DETROIT – With Hyundai Motor America’s former top executive, Finbarr O’Neill, now at its helm, Mitsubishi Motors North America Inc. borrows some tried-and-true survival strategies from its South Korean competitor.

Mitsubishi’s new sales and marketing strategy includes the 10-year, 100,000-mile (160,000 km) powertrain warranty O’Neill employed to resuscitate a flagging Hyundai in the late 1990s.

Mitsubishi now finds its situation as dire as Hyundai’s was when it resorted to such sales tactics. U.S. sales decreased by more than 20% in 2003 from year-prior.

What’s more, Mitsubishi’s youth-oriented strategy imploded when car-loan default rates reached new highs, making the U.S. business arm unprofitable. This prompted a complete reorganization of Mitsubishi’s North American management team, including the installation of O’Neill in the top position.

At the North American International Auto Show, O’Neill announces the death of the youth market as core to Mitsubishi – an auto maker that once took every opportunity to boast its youngest-in-industry median consumer age.

O’Neill branded the youth strategy of years past a “marketing problem.” The solution, he says, will come through focusing not on emotional concepts, but on the product, which he says will give customers “rational reasons why they should buy Mitsubishi.”

With a focus on the product, consumers will cease to view Mitsubishi as tied to the “fun-to-drive” or “cool” image it previously cultivated. Rather, O’Neill wants Mitsubishi to seen as a “smart choice.”

While not dropping its “spirited cars for spirited people” tagline, O’Neill stresses that its motto doesn’t translate to youth: “Spirit doesn’t come with an age limit,” he says.

Increased dealer support is the third prong of Mitsubishi’s reorganization.

With its announcement that Mitsubishi has committed to a brighter future in the U.S. market, the auto maker unveils two concept cars that hint at future U.S. projects.

The Sport Truck Concept, designed by the auto maker’s Cypress, CA, design studio, indicates the design direction of its future pickup truck.

Mitsubishi has announced that it will build a pickup truck based on DaimlerChrysler AG’s Dodge Dakota in 2005 as an ’06 model. (See related story: Chrysler, Mitsubishi Work Diligently on Pickup)

The concept, however, looks less like a pickup truck than a car-based, low-slung sport/utility truck with a pickup bed.

Mitsubishi’s Eclipse Concept E not only hints at the future design direction for the next-generation Eclipse but also is a powertrain concept, as well. The car is powered by “E-Boost,” a gas-electric hybrid system that mates a 3.8L, 269-hp engine to drive the front wheels and 159 kw from the electric motor to the rear wheels – making for a combined 470 hp.

The fourth-generation Eclipse almost certainly will not come with the option of a hybrid. Due out in 2005, the Eclipse will continue to be assembled on the Project America platform, which also supports the Galant midsize sedan and Endeavor cross/utility vehicle, at its Normal, IL, manufacturing facility.

The design concept features a more swooping body style and premium sports car-inspired rear end, for a look that’s more similar to Eclipse generations past, rather than the model currently being sold.

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