Is Mitsubishi Finally Poised for a Comeback?
While Mitsubishi Motors isn’t in the same dire straits it once was, the brand has only recently stopped hemorrhaging sales after doing so for over a decade. After losing half of its annual volume between 2002 and 2004, Mitsubishi trudged further into delivery darkness during the recession — finally dragging itself back into the light after SUV sales improved. Unfortunately, its image has not been so quick to recover and volume has a long way to go before anyone at the company will be celebrating.
However, the brand has a lot of closeted fans over the age of 30 in the United States. There was a time when Mitsubishi offered affordable transportation that you could happily live with and a handful of fun models for those interested in hooliganism. People who remember driving those vehicles don’t see Mitsubishi as a lost cause, but as a formerly important automaker that has seriously lost its way.
Fortunately, the brand now has the means to find itself. With help from the Renault-Nissan Alliance and its own parent company, Mitsubishi Motors may even be poised for a comeback. Last year the company sold 103,686 vehicles inside the United States, a feat which hadn’t been replicated since 2007 when the brand was still losing sales like they were socks in a dryer.
According to Automotive News, chief operating officer Trevor Mann sees a time when Mitsubishi can return to annual volumes of 300,000 units. There’s already plan in place to bolster the brand’s lineup by platform sharing with Nissan and interesting tech developments coming from Mitsubishi Electric. But the cornerstone of Mitsubishi’s strategy for the next decade will hinge on ensuring its finances don’t get out of whack.
“We are completely on track in terms of the midterm plan that we announced in October of last year. Just to refresh your memory on those numbers, to go from around 1 million sales to 1.3 million sales globally. Also a 30-percent increase in our revenues and to return to a 6-percent margin in terms of level profitability,” Mann explained. “We just collected all of the results for our fiscal year and it’s 1.1 million [units]. We’re ahead of the profit target and we’re ahead of the volume target. Overall, I’m quite pleased. We’re doing well.”
Mann says getting things in order for China and North America will be the next big hurdle. While Mitsubishi has fallen on hard times in both important markets, it still moves over a million vehicles on a global scale. But things have improved. It’s joint partnerships in China yielded a 90-percent increase and the U.S. saw a 10-percent bump.
“Ten percent growth in the U.S. last year without the significant impact of a new model suggests that we are starting to do things right collectively,” Mann said. “We have a lot of work to do still. We’re aiming for significant growth in the future. In the mid to long term, I see us moving over the 100,000 units in the U.S. to really getting towards 300,000 units over the long term.”
Mitsubishi has been in regular talks with its dealer network to improve throughput and take suggestions. Financing ability has been a reoccurring topic, which the company says it has been handling, but dealers also want new models. Crossovers are certainly helping build the business but shops would like to see more of them and maybe a reasonably priced pickup truck (please name it the Mighty Max).
“[A pickup is] something we will look to address in our long-range product plan. It’s on everybody’s shopping list,” Mann explained. “It’s obviously in our long-range product plan to make it work for us in the U.S., but we have nothing to actually announce right now.”
However the brunt of Mitsubishi’s new vehicles will come via Nissan as the pair focus on platform sharing. Fortunately, teaming up is going to save them a bundle. “The alliance is a two-way street. We make contributions to the alliance,” said Mann. “In terms of the benefits we are seeing on our bottom line, we should expect to see around $250 million directly to our bottom line for fiscal year ’17. We would expect that would grow in fiscal year ’18. The bulk of those savings came from procurement in terms of purchasing cost reductions, parts and services.”
“Our engineers are working now on common platforms and common powertrains, so the investments we have to make in those technologies are either a half or a third of what we would have to make if we were doing it by ourselves. We see that today as a cost avoidance instead of a profit improvement. We’ll start to see the benefits of them in the models that will start to hit the streets around 2020, 2021.”
Meanwhile, Mitsubishi Electric is upping its tech game with a new super-accurate GPS system. Mitsubishi Group is still a massive zaibatsu, having many arms that could potentially help one another. The company is currently trying to fill in the gaps to make that happen. While it will still persist as a traditional parts supplier, it’s also diving into new tech. The GPS system is accurate to within just a few inches and could be a major leap forward for autonomous driving.
Mitsubishi Electric is also working on a mirror-less system for vehicles, that uses artificial intelligence. While this also has self-driving applications, it is intended to function as a way to replace traditional mirrors to improve aerodynamics and safety. We aren’t likely to see it in North America anytime soon, but both Europe and Japan have new rules that allow automakers to replace rearview and sideview mirrors with camera monitoring systems.
“Camera systems for mirrorless cars have already been announced, but our system is the first to implement object recognition,” said Hidetoshi Mishima, general manager for smart information processing technology. “We believe that we have a first-mover advantage.”
The company wants to become more than a seller of components, though. Owning the satellites responsible for the advanced GPS system, next-gen mapping hardware, slick cameras with image recognition, and an established supplier network puts Mitsubishi in interesting territory. While still entirely independent, Mitsubishi Motors stands to benefit from these technologies as all of Mitsubishi’s firms are financially linked to a certain degree. If one facet makes money, it’s always better for the whole.
A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.
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