By on November 14, 2013

mitsubishilineup

News of Mitsubishi’s rebadging of Renault-Samsung vehicles for the US market is being greeted with far less enthusiasm around these parts than one would expect the internet to greet news of any French vehicles coming to America. One angle that isn’t being explored much comes from commenter callisall, who writes

if anyone else was scratching your head (like I was) about how Mitsu makes money in the USA, Mitsu is the third largest seller of cars to subprime borrowers behind Chrysler and Dodge.

So by outsourcing its R&D and focusing on the subprime market (and perhaps parts for its cars), it looks like Mitsu can make its US operations worthwhile.

Industry observers know that R&D is the most expensive part of new vehicle development, and by rebadging Renault-Samsung vehicles as their own, Mitsubishi gets to skip out on this very expensive exercises while getting proven technology that’s already been on the market for a few years. Is it possible that other Mitsubishi-derived vehicles like the Outlander could become variants of some Renault-Nissan project? Perhaps.

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25 Comments on “Mitsubishi: A Finance Company That Happens To Sell Cars?...”


  • avatar
    nudave

    Of course this news won’t generate any excitement for Francophiles. A rebadged Renault-Samsung vehicle made in Korea and sold as a Mitsubishi will be be about as French as corn dogs. If this satisfies anyone’s definition of “French”, then they would be satisfied with the Nissan Versa – a previous generation Renault Clio dumbed down for the third world and made in Tennessee.

    • 0 avatar
      racer-esq.

      It’s made in Mexico, like the beer that the most interesting man in the world drinks, when he drinks beer, and a lot of hot women. And it’s the other way around. Renault-Nissan took the small FWD car platform that people in France actually aspire to, and rebadged it as the Nissan Versa/Dacia Logan for people in the US and Germany looking for a good basic car for a very low price.

    • 0 avatar
      billfrombuckhead

      Hyundai Kia do the most subprime loans and do the lending themselves. Chrysler arranges the loans through lenders such as Chase, Ally and others.

      Makes sense another Korean car in the subprime market subsidized by manufacturer financing, it’s worked for Hyundai.

  • avatar
    Kenmore

    “far less enthusiasm around these parts than one would expect”

    Why would one expect any enthusiasm at all for yet more cookie-cutter cheapo small cars in a market already spilling over and staining the floor with them?

  • avatar
    Omnifan

    Pretty soon we’ll be back to “0 down, 0 monthly payments for 3 years, and no job, no credit, no problem” days of yore.

  • avatar
    ash78

    Hasn’t this always been Mitsu’s schtick? I have always seen them as the company with the fewest recognizable cars to the average American, the company whose lineup only becomes familiar to you when you walk into a Carmax with a 550 credit score and no money down. In the lending biz, that’s part of the definition of “adverse selection” — you offer options that only attract the worst buyers with the highest default risk.

    For Chrysler/Dodge, I just chalked it up to a necessity of doing business with a lot of their Af-Am target market, who disproportionately have to rely on “creative” financing arrangements.

    • 0 avatar
      morbo

      The AfAm side of my family is insulted by the insinuation that AfAms can only afford cheapo Mopar junk.

      Now if you’ll excuse me I have to go gas up my 300C and help my uncle tuneup his Dakota, his wife’ Avenger, and his son’s Sebring.

      In all seriousness, it’s targeting a credit score, not targeting a race. I’ve seen plenty of hillbillies in the local Dodge and Hyundai shops.

      • 0 avatar
        ash78

        Fair enough — I just felt comfortable making that statment due to Dodge’s explicit targeting of the black community for a lot of their vehicles. And it’s proven out pretty well.

        Some cars aren’t necessarily targeted at particular groups, but end up in their hands due to other financial reasons — Pontiac, for example, spent a couple decades as the go-to car for credit-challenged people. The difference between resale and wholesale was so big, those cars could absorb negative equity, be approved for people with bad credit, and still net a nice profit for the used dealer. Result: Lots of Pontiacs in the hood and the trailer park in the 90s and 00s.

        Pontiac: Winning Every Race

      • 0 avatar
        28-Cars-Later

        I concur with Morbo. I tip my hat to your community sir as I have never seen AfAm folks ricing out cheap Asian cars, they tend to drive real cars.

  • avatar
    racer-esq.

    I’m not going to buy a Renault-Samsung, but anything that puts more competition in the market is a good thing, and will create downward pricing pressure across the board.

    I’m surprized Nissan is willing to allow this kind of entry level competition. Trouble at home in the Renault-Nissan relationship?

  • avatar
    Kyree S. Williams

    Mitsubishi is America’s Dacia…except…not.

  • avatar
    wstarvingteacher

    I think Mitsubishi was cursed in the U.S. Market and would have been even if they had a superior product. I personally drove a Ram 50 for a while and thought it was pretty good. I know they had their problems but think there might have been more to it. My BIL served in WW2 and returned severely wounded. Mitsubishi was the maker of the Japanese Zero plane and heavily involved in the war effort. He didn’t seem to have this feeling about the Dodge labeled product but every time he saw a Mitsubishi label he had something bad to say.

    You may think this is over-stated and perhaps it is. All I know is that they have consistently fallen short and other Japanese products have not.
    Using another label like Renault/Samsung might help.
    The aging and death of the WW2 generation may help.
    Being in the financing business may help.
    I think some of their products were pretty good (think diamond star) and that did not seem to help.

    We will see.

  • avatar
    Joe McKinney

    Here in North America the Japanese car brands have traditionally fallen into three categories based on reputation and desirability.

    Tier 1 – Toyota and Honda
    Tier 2 – Nissan, Mazda and Subaru
    Tier 3 – Mitsubishi, Isuzu and Suzuki

    Two of the three bottom tier Japanese makes have already quit the North American passenger car market and Mitsubishi is just barely hanging on.

    I have said this before and still believe one of the biggest things that hurt Mitsubishi in North America was the end of their partnership with Chrysler. Mitsubishi used to share some development costs with Chrysler and they also made large numbers of vehicles which were sold by Chrysler. When Chrysler ended this relationship Mitsubishi was left to go it alone.

    • 0 avatar
      TMA1

      I would add that Nissan probably sits on the second tier alone, below Honda and Toyota, but above Mazda and Subaru.

      There’s plenty of worry about Mazda’s future in the US (mostly unfounded, I think, given the strength of the 3 and the fact that it will soon be produced in Mexico).

      Subaru has Toyota as a backstop. No one seems to worry about Nissan, and they seem to be doing alright.

    • 0 avatar

      You can add Daihatsu to Tier 3. What’s most amazing to me, I still see them running around. Must be getting parts from Toyotas.

  • avatar
    schmitt trigger

    Joe;yes indeed.
    Your ranking, and the ordering within the rank, is 100% spot on.

    In 40 years of driving, the worst reliability vehicle I’ve owned was a 1985 Mitsubishi Montero with the infamous 4 cylinder carbureted engine.

    The most reliable? A 1992 Toyota Tercel.

  • avatar
    PrincipalDan

    Without a V6 in the Galant you won’t get a second look from me.

    If it suddenly became a re-badged Altima that would definitely be an improvement.

  • avatar
    Pch101

    “if anyone else was scratching your head (like I was) about how Mitsu makes money in the USA…”

    Mitsubishi doesn’t make money in the US. The company turns a profit in most of the world, but not here.

    Mitsubishi sells very few vehicles in the US, subprime or otherwise. It’s not a finance company that sells cars, it’s a car company that doesn’t sell much of anything to American customers. It’s a modestly profitable enterprise globally, but not here.

    The Renault rebadging program is a last ditch effort to save Mitsubishi’s American operations. One of the challenges in serving the US market is that the types of cars that sell in high volumes in US tend to be unpopular in other markets. It doesn’t pay for Mitsubishi to invest heavily in a car that wouldn’t have many takers outside of the US. Mitsibishi stands no chance against the Accord, Camry, etc. — it will have to settle for the scraps.

  • avatar
    dwford

    Selling random cars rebadged from other automakers worked so well for Suzuki….


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