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Comeback 101: How Mitsubishi Plans to Reinvent Itself

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On: Wed, Aug 7, 2013 at 2:06PM | By: Teddy Field

Comeback 101: How Mitsubishi Plans to Reinvent Itself

With Suzuki's recent departure from the American market, many speculated that Mitsubishi would be the next to fold. The Triple Diamond brand is barely clinging to a token 0.04% market share, with just 35k sales year-to-date. Once the preferred engine/car supplier of the Chrysler Corporation, Mitsubishi has seen its American sales plummet from 320,000 in 2001, to just 57,790 in 2012. Production of the Eclipse and Endeavor SUV have ceased at Mitsubishi's plant in Illinois, and when's the last time you remember even driving by a Mitsubishi dealer? To an outsider, things look grim, to say the least. But the home office in Japan isn't worried. In fact, the company has just embarked on an ambitious 'streamlining' mission of its worldwide operations. And its Colonial outpost is about to see some drastic changes.

Last year, Mitsubishi sold $18 billion dollars worth of cars around the globe. For some markets, they would spend hundreds of millions of dollars to develop and build unique models that would be sold only in that region. The U.S. Eclipse and Endeavor SUV, for example, were designed specifically for the North American market. Toyota does the same thing, but it's playing with a lot more than just 0.04% of the market.

A key element of Mitsubishi's “Jump 2013” business plan is Concentrating Resources. To that end, region-specific models have been discontinued, and all of the company's development resources are now focused on “globally strategic” models, like compacts and SUVs. Electrified powertrains also play a big part in Mitsubishi's new product strategy, as the company plans to launch eight new electric-powered models by 2015. The first of these electrics, a plug-in hybrid version of the redesigned Outlander SUV, is already on sale in Japan, and it'll go on sale in the U.S. early next year. Their first globally available compact, the 2014 Mitsubishi Mirage, is also expected to arrive at dealers in early 2014.

According to a report published by R. L. Polk & Co., the U.S. marketshare of electric-powered vehicles could climb to 64% by 2025. Depending on the government's Corporate Average Fuel Economy target, automakers could be forced to adopt hybrid technology en masse, in order to meet their MPG target. Currently, hybrid/plug-in systems are the most viable way to achieve high fuel economy, and the technology is expected to be cheaper to produce by 2025. Customers are also starting to accept hybrid vehicles, with May 2013 hybrid sales climbing 30% (60k units sold) and plug-in hybrid sales increasing 69% (5,694 units sold). Should these projections and sales trends hold true, Mitsubishi's new electric lineup could be a major success.

Sales of the recently launched 2014 Mitsubishi Outlander are already 25% higher than last year. The revised 2014 Mitsubishi Outlander Sport has also seen an 80% increase in sales. Both vehicles are more competitive than their predecessors. And the home office in Japan is rumored to have given their American office a $170 million dollar ad budget. The recent Skywire Live promotion on the Discovery Channel was the first time that a Mitsubishi ad has run on primetime television since 2005. Not only does that make the rumor believable, it shows that company brass are taking the American market seriously again.

Unlike Suzuki, Mitsubishi has the financial, engineering, and production capability needed to reassert itself into the American market. We may never again see Triple Diamond cars like the Eclipse, or 3000GT. But you can bet their new product line will be as efficient as those cars were exciting.

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